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Taiwan – Qimonda AG and Elpida Memory Inc. has signed a memorandum of understanding (MOU) to jointly develop their next generation process technology. According to DRAMeXchange, with the cooperation between Elpida and Qimonda, Elpida’s market share, for the first time, will take the lead from Samsung Electronics and become the market share leader in the DRAM industry. However, transitioning from trenched to stacked process will require Qimonda and Elpida a minimum of six months—enough time for Samsung to catch up in its market share if the company implements its market strategy aggressively. Faced with this fierce competition for market share, the expected industry recovery in H2 2008 becomes more uncertain now.

The MOU between Elpida and Qimonda also made Inotera Memories’ future more uncertain. Inotera currently uses Qimonda’s trench process for its 120k WPM, high capacity production line. With 58nm and buried wordline process development’s future hanging in the balance, Nanya Technology Corp. sought out for a different partner—Micron Technology—for cooperation. Market analysts were expecting that Nanya would acquire all of Qimonda’s Inotera shares to fully cooperate with Micron in developing stacked process.

In light of these latest developments, market observers want to find out whether Inotera will be producing DRAM for both Qimonda+Elpida and Nanya+Micron camps based on stacked process technology. Analysts are also keeping close watch on the schedule for such process transition if indeed the aforementioned event occurs.

Lastly, although Samsung, Micron and Elpida are all very confident in their future process development, DRAM market analysts believe that capital raising from financial market will be the most important key to winning the competition in the DRAM market. DRAM market players suffered heavy losses due to the steep 512Mb DRAM price decline (as much as 85 percent) in the past year and the high cost of constructing a new 12in facility (in the amount of $4 to $5 billion).