This case is intended to be used in an Strategic Management or Strategic Alliances course to highlight the challenges faced by second tier industry players in a capital intensive industry with complex alliances and increasingly severe industry cycles. The DRAM industry has become an ex-growth highly cyclical industry which requires high amounts of capital expenditure and scale to succeed. Taiwan DRAM companies have been facing unsustainable trends already for sometime as operating cash flows have failed to match capital expenditures even during the good times of the “Tech Bubble” of the late 1990s. The situation of DRAM companies deteriorated in the late 2000s as players over estimated Windows Vista related demand for DRAM and over invested. The situation worsened still further as the Great Recession caused a slump in world wide demand. The situation of Taiwanese DRAM companies was very dire despite the exit of several companies from the industry during the Great Recession. The Taiwanese government attempted to lead a consolidation in the industry but failed as companies lost interest in its proposal due to several reasons and an upturn in the industry cycle. However, the DRAM cycle seemed to play out itself rather quickly as companies once again invested heavily to remain competitive. The investment and still fragile industry led to increased supply, lower prices, and the return of financial difficulties. All the while, the leading players in the industry, mainly Koreans, keep gaining market share and increasing their technological gap versus industry peers. Finally Elpida of Japan apparently prepares another attempt at consolidating the industry. The alliances in the industry constantly change, face challenges, and adapt to each twist and turn in the industry. Despite deepening alliances the fate of Taiwanese DRAM companies appear very bleak. Tough choices will have to be made in the near future as the market seems to head for another down turn while Elpida apparently prepares to make new consolidation/alliance offers. Should the Taiwanese DRAM companies attempt an industry exit such as the one executed by Winbond, should they further deepen their alliances, or just go it alone?