The Taiwanese government plans to merge its indebted DRAM memory chip makers into a single company called Taiwan Memory Company (TMC) in the following months, in an effort to effort to consolidate Taiwan's ailing DRAM industry.

The plan was announced today by the Taiwan Ministry of Economic Affairs (MOEA). Taiwan Memory Company (TMC) will be established within the next 6-month period and will be run by John Hsuan, a vice chairman and former CEO of contract chip giant United Microelectronics. The Taiwanese government will hold less than the 50% of the company's shares, MOEA said.

Japanese Elpida Memory of and U.S.-based Micron Technology are the candidate technology partners of TMC; a decision expected to be finalized in the following three months. Both Micron Technology and Elpida Memory have been suffering from the global recession.

TMC is also expected further negotiate with Taiwan's six existing DRAM manufacturers for possible consolidation through mergers and acquisitions, as soon as it acquire DRAM related intellectual properties and technologies from either candidate foreign partner (Elpida or Micron).

The move would give Taiwanese DRAM makers access to key intellectual properties related to DRAM, in an effort to enhance their competitiveness.