20 February 2012

DRAM leaders rumoured to be merging

The dram market is a place where only the brave venture.

The need to reduce the cost per bit forces dram manufacturers to the latest processes, but varying demand means - or has in the past - that memories are sold for less than it cost to make them.

That way, madness lies and many companies, such as Infineon's Qimonda subsidiary, have fallen by the wayside or, like NEC, taken the opportunity to get out of the market.

It's a business tough enough that even the fourth largest dram company appears to be in financial difficulties and may be a takeover target. Rumour has it that Micron and Elpida will join forces, creating a dram manufacturer large enough to challenge Samsung.

But would such a move benefit the market? The electronics industry often appears to defy the logic of economics and there's no guarantee that creating such a company would bring the benefits their architects intend.

Graham Pitcher

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