Powerchip could consider Elpida merger, shares jump

(Recasts with details, quotes; updates share prices)

By Baker Li

TAIPEI, Nov 21 (Reuters) - Powerchip (5346.TWO), Taiwan's top DRAM chip maker, said on Friday it was seeking closer partnership with Elpida (6665.T), including a possible merger with the Japanese firm, to weather the sector's worst ever downturn.

When asked if Powerchip Semiconductor Corp would consider a merger with Elpida Memory Inc, the world's No. 3 DRAM maker, Powerchip Chairman Frank Huang told reporters: "We don't rule out any possibilities."

"A very deep relationship will be working out but we can't talk too much now because we are listed companies."

Talk about consolidation has swirled through the global DRAM industry in recent months, as the sector needs to streamline amid its struggle with a large oversupply of dynamic random access memory (DRAM) chips, which are used mostly in computers.

Powerchip shares closed up 6.6 percent at their daily limit in Friday trading in Taiwan, outpacing a 2 percent gain for the main TAIEX . Elpida shares shot up 11.1 percent, also outperforming the broader Nikkei's .N225 2.7 percent rise.

In Seoul shares of world No.1 memory chip maker Samsung Electronics (005930.KS) closed 4.5 percent higher and those of Hynix Semiconductor (000660.KS) added 4.2 percent.