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ProMOS, Taiwan's No.3 DRAM chip maker, and larger Japanese rival Elpida, have jointly submitted a proposal to the Taiwan government for state assistance.
"Under the government's guideline, Elpida came to us to talk," ProMOS spokesman Ben Tseng said on Thursday, adding their proposal included a possible cooperation on technology.
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"The government hopes to keep technologies in Taiwan and Elpida has seen our technology ability," Tseng said but declined to give any details on the proposal.
ProMOS Technologies Inc has in the past asked for financial assistance from the government but the company declined to give specific details.
In mid-December, Taiwan's economics ministry said it would support the struggling local DRAM industry by helping it develop more local technology and boosting its global competitiveness.
Local media have said ProMOS was likely to end its alliance with South Korea's Hynix in favour of Elpida as one of the Taiwan government's conditions for help.
Taiwan's government has said the direction of consolidation is clear and it could also provide aid to local players, who are posting major losses as they struggle through the industry's worst-ever downturn.
But the companies themselves will have to come up with reorganisation proposals based on the government's overall strategy.
Powerchip Semiconductor, Taiwan's top DRAM maker, has recently submitted a plan detailing plans to work with Elpida Memory on their Rexchip joint venture, but did not give further details.
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The economics ministry has asked Powerchip to resubmit an amended plan that conforms with the ministry's expectation, but the ministry did not provide more specifics.
Powerchip shares were down 3.1 percent and ProMOS shares lost 3.6 percent in Asian trade, while the main TAIEX index shed over 5 percent on Thursday.
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