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FACED with the biggest credit crisis and longest profit recession in recent memory, businesses are fighting to conserve cash.
Two manufacturers in Japan, NEC and Hitachi, merged their memory businesses to form Elpida in 1999, the same year that another Japanese maker, Fujitsu, abandoned the DRAM business.
STMicroelectronics, which will sell both its NOR and NAND flash memory businesses, will receive a stake of about 49percentt, along with a payment of $468 million.
Although the Taiwanese have also suffered, they have protected themselves from the usual cycles by maintaining both foundry and memory businesses: if one is doing badly, they simply shift capacity to the other.
For the front-end, "we estimate that weakness in 200 mm is driving greater than 70% of December order weakness," CSFB said, adding that the 300 mm and memory businesses should be flat, representing approximately 60% of overall orders.
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Competing in the memory business will not be an easy battle.
Last year, Intel's flash memory business lost $500 million on sales of $2 billion.
Over all, the company beat expectations because of the strength of its memory business.
As of last quarter, A.M.D., the second-largest flash memory supplier, received 35percentt of its revenue from its flash memory business.
"What Intel doesn't want is another company like Intel dominating the memory business," said David Wu, an analyst with Global Crown Capital.
Even as the flash memory business is growing rapidly over all, however, some formats are losing market share.
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