According to DRAMeXchange, a research division of TrendForce, as PC shipments are continually adjusted downwards and yearly growth has decreased by 5% YoY, demand for the peak season is not as strong as expected and the oversupply situation continues to worsen. As a result, contract price for 2 Gb chips fell by 22.5% in the third quarter, from US$1.11 in July to US$0.86 in September. Server and mobile DRAM are also showing falling price trends, resulting in an 8.5% drop in the value of the DRAM industry compared to the previous quarter; DRAM suppliers' revenues are falling across the board. However, looking at third quarter demand, with strong shipments for mobile devices like smartphones and tablet PCs, mobile DRAM accounted for 25% of total DRAM output, a significant increase from less than 20% in the second quarter. Consequently, market share is on the rise for memory makers with higher mobile DRAM ratios, like Samsung and Elpida. For the DRAM industry, improving core competitiveness lies in proper product adjustment, the key to profitability with such bleak market conditions.

According to DRAMeXchange, a research division of TrendForce, given the persistent oversupply situation in the global DRAM market, along with the -5% YoY shipment growth for PCs, October contract prices have dropped below $16 USD, and are continuing to approach the $15 USD mark. The trends pose as yet another test to the cost structures of DRAM makers. With prices approaching or dropping below cash cost, manufacturers are faced with the option of either undergoing production cuts or shifting their focus towards non-DRAM products.

Other than ProMOS, which chose to quit the DRAM market due to financial woes, manufacturers like Elpida and Rexchip have taken the initiative to lower their output levels in August. Powerchip, beginning September, took a similar initiative by adjusting P3 wafer levels, whereas in the following month, Nanya and Inotera made the official announcement to implement 20% production cuts. For the South Korean DRAM manufacturers, whose cost structures appear to be superior to those of other competitors, no production cuts have been announced nor taken, although efforts to control output ratios have been intensified. At the same time that production of commodity DRAM is being lowered, an increasing amount of emphasis is being placed on the production of the more profitable mobile and server DRAMs.

US-based chip manufacturer GLOBALFOUNDRIES is said to be planning on getting itself a fab in the home country of arch-rival TSMC (Taiwan). This would be done through the acquisition, for NT$20 - 30 billion (US$ 506 - 760 million), of (troubled and soon to be delisted) DRAM company ProMOS Technologies who owns a 300 mm plant at Taichung.

By snatching up ProMOS, GLOBALFOUNDRIES is expected to have a better chance of getting contracted by companies (in Taiwan and China) currently working with TSMC or UMC.

ProMOS' Taichung fab has a production capacity of 60,000 wafers per month and that would add to the 130,000 wafers/month from GLOBALFOUNDRIES' facilities in Germany and Singapore.

Elpida Memory, Inc., Japan's leading global supplier of Dynamic Random Access Memory (DRAM), today announced that its Hiroshima Plant has begun volume production of 40nm process 2-gigabit DDR3 SDRAMs. Since completing development of the DDR3 SDRAM last October it has taken Elpida only two months to ramp up mass production.

The new 2-gigabit DDR3 SDRAM achieves 44% more chips per wafer compared with Elpida's 50nm DDR3 SDRAM and a 100% yield for DDR3 products that operate at 1.6 Gbps, the fastest speed standard for current DDR3. It also supports high-speed products. Compared with 50nm products, it uses about two-thirds less current and supports 1.2V/1.35V operation as well as DDR3 standard 1.5V, resulting in reduced power consumption of around 50%.

Initially, Elpida plans a phased expansion of 40nm 2-gigabit DDR3 SDRAM mass production at its Hiroshima Plant. In the second quarter of 2010, 40nm process production will also begin at Rexchip, a subsidiary in Taiwan, to increase the manufacture of 40nm process products in order to lower products costs. Depending on conditions in the DRAM market, Elpida may transfer 40nm process technology to foundry partners ProMOS and Winbond to expand production based on this technology to an even higher level.

Elpida Memory, Inc. and ProMOS Technologies announced today the signing of a DRAM foundry agreement. This agreement marks the beginning of mutually beneficial business cooperation.

According to the agreement, Elpida will provide advanced DRAM process and product technologies to ProMOS, while ProMOS will provide certain amount of manufacturing capacity at ProMOS' Taichung 300mm wafer fab to Elpida for the manufacturing of Elpida's advanced 1Gb DDR3 device. Trial runs will be completed in the first half of 2010, with mass production following in the second half of the same year.

Dr. M. L. Chen, President & Chairman of ProMOS Technologies, noted that Elpida has long been globally recognized as a leader in the development of leading edge DRAM technologies. The synergistic partnership built through this agreement will combine strengths from both companies; Elpida's 1Gb DDR3 device is among the most cost-competitive product in the industry, pairing well with ProMOS' strength in 300mm manufacturing. Dr. Chen further noted that through this agreement, ProMOS will be able to rapidly increase its capacity utilization rate at its Taichung 300mm facilities. With the recent turnaround in the DRAM market, ProMOS has embarked on the road to recovery.

Hynix Semiconductor and ProMOS Technologies today announced the signing of the Amendment to strengthen their existing strategic alliance. According to the Amendment, Hynix licenses to ProMOS 50 nanometer-class DRAM stack process technology, while ProMOS offers to Hynix such DRAM products from its 300mm fab capacity. To achieve timely technology transfer, Hynix plans to commence the government filing process immediately. Additionally, Hynix plans to cooperate with some financial investors to buy 8%-10% portion of shares in ProMOS through private placement to strengthen their long-term cooperation relationship.