TAIPEI, 11 FEBRUARY 2009 - Taiwanese DRAM maker ProMOS Technologies may soon find itself squeezed out of a potential four way tie-up that includes Japan's Elpida Memory. The company will get no financial aid from Elpida to make payments on an estimated US$330 million in bonds due by the end of this week, an Elpida spokesperson said Wednesday.
Up to now. ProMOS has been in discussions with Elpida as well as Taiwan's Powerchip Semiconductor and Rexchip Electronics to form a group together as a way to battle the ongoing DRAM downturn and global economic recession.
But failure to make payments due this week will likely sink ProMOS's chances for such a deal.
"They must clear redemption of that [debt] on their own," said Kumi Higuchi, vice president of communications at Elpida.
If ProMOS fails to raise the money needed to make the payment, then "that's too bad," she added. "We don't have the money to help them."
ProMOS has appealed to the Taiwan government for help and asked banks for an NT$6 billion (US$178 million) loan, but so far has not received the needed assistance.
"If [ProMOS] can make the payment and continue in this business, then we will talk," said Higuchi.
ProMOS has been the focus of many rumors over its potential to meet the payment.
On Monday, the Chinese-language Economic Daily News paper reported that ProMOS had already applied for restructuring protection in Taiwan, a situation similar to bankruptcy.
In a statement to the Taiwan Stock Exchange the same day, ProMOS said it had done no such thing.
The company could not be reached for comment on this report and did not return phone calls.
DRAM makers globally have faced tough market conditions for over a year that mean they produce chips at a loss. Last month, German DRAM maker Qimonda filed for bankruptcy protection and analysts say more DRAM makers could follow.
Last Friday, Elpida announced its biggest loss so far amid the downturn. The company's net loss widened to ¥72.3 billion (US$804 million) in the final three months of last year, compared to a loss of ¥12.1 billion during the same time a year earlier. The chip maker blamed a sharp, 50 percent quarter-on-quarter drop in the price of mainstream DRAM as a main culprit for its loss, but also said slower demand for high end DRAM and a stronger Japanese currency also hurt its earnings.
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