Market sources generally believe that Powertech Technology (PTI) will not lose orders because of Micron Technology's takeover of its main DRAM customer Elpida Memory, as the backend supplier's technology advances and manufacturing capability will instead attract more orders from Micron which is looking to expand its mobile DRAM business.

Micron is unlikely to shift mobile DRAM orders from PTI to other packaging and testing firms, at least in the short term, given that PTI's advances in technology and capacity will help Micron further strengthen its presence in the DRAM landscape, the sources indicated.

As long as the Japan government does not intervene and keeps staying out of Elpida's rehabilitation program, the bankrupt DRAM chipmaker should ultimately be acquired by Micron, the sources said. The pair is expected to disclose details of their proposed merger agreement by the end of August, the sources added.

Micron is eyeing a bigger share of the global mobile DRAM market, while keeping its presence in the standard DRAM area, the sources pointed out. After its Elpida acquisition, Micron will have Elpida's Hiroshima plant mainly manufacture mobile DRAM chips using Elpida's 25nm process design. As for PC DRAM, Micron is looking to outsource the entire production to Taiwan-based Inotera Memories and Rexchip Electronics, the sources said.

Both Inotera and Rexchip would use Micron's 34nm process to manufacture PC DRAM chips on an OEM basis, the sources noted.

In related news, PTI has reported consolidated revenues of NT$3.74 billion for April 2012, up 29.7% sequentially and 11.3% on year. The sales growth reflects its strategic investment in Greatek Electronics that took effect on April 1.