April 9, 2009 / 8:48 AM / in 10 years

UPDATE 1-U.S. Micron eschews new Taiwan DRAM company

* Micron to stay out of Taiwan Memory Co

* Micron fears losing some technology to Elpida

(Recasts with details, quotes)

TAIPEI, April 9 (Reuters) - U.S.-based Micron Technology MU.N has decided not to join a new computer memory chip company led by Taiwan’s government because of concerns it could lose some technology to its Japanese rival Elpida 6665.T.

Taiwan Memory Co (TMC) announced last week that it had chosen Elpida Memory to be its technology partner, jointly developing new DRAM chips for computers and other mobile products, but said it was open to other partnerships as well. [ID:nTP104915]

TMC said Micron had expressed interest in working with it, but Micron decided on Thursday it would not take part in TMC, based on the new company’s current structure.

“The biggest concern is technology contamination,” said Fred Fishburn, an assistant vice president at Inotera 3474.TW, a joint venture between Taiwan’s Nanya Technology (2409.TW) and Micron, and an executive at Micron in Taiwan.

“If we go into TMC, we might risk losing some technology to Elpida,” Fishburn told a joint news conference on Thursday.

One month ago, Taiwan’s government announced the formation of Taiwan Memory Co to help rescue the island’s struggling DRAM sector to compete with global giants Samsung (005930.KS) and Hynix (000660.KS) of South Korea.

However, Nanya Tech Chairman Wu Chia-chau told the same conference that Nanya, Inotera and Micron will work more closely in the future, including developing new chips that have fatter margins and migrating to more advanced process technology to further cut costs and boost efficiency.

Wu said both Nanya Tech and Inotera would raise funds to boost working capital, adding he hoped the government could inject capital into the companies to help the Nanya-Micron camp. He did not give dollar figures.

The announcement came after the Taipei stock market closed on Thursday. Nanya Tech's shares rose 5.8 percent and Inotera shares rose 7 percent to their daily limit, outpacing the main TAIEX's .TWII 4.1 percent gain. (US$1=T$33.8) (Reporting by Baker Li; Editing by Ken Wills)

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