Taiwan to Invest $900 Million in Memory Chip Makers

Goal is to improve industry's competitiveness

Taiwan's government said on July 21 it plans to invest up to 30 billion Taiwan dollars (US$916 million) in local memory chip makers to improve the industry's competitiveness.

The money will go to the company or companies that can carry out restructuring plans to enhance the competitiveness of the local DRAM (dynamic random access memory chip) industry, said Jung-Chiou Hwang, vice minister of economic affairs.

A committee would be set up to review DRAM makers' proposals, Huang said.

In response to the remarks, Powerchip Semiconductor Corp. said it was considering applying for the government investment. "Powerchip meets the conditions the government has set," company spokesman Eric Tang said. Powerchip is Taiwan's second-largest DRAM maker by revenue after Nanya Technology Corp.

Industry analysts said the new plan was an about-face by the government. In March, the government said it would set up a new chip company called Taiwan Memory which would be tasked with developing next-generation chip technologies to increase the island's competitiveness in the DRAM sector. In April Taiwan Memory chose Japan's Elpida Memory Inc. as its technology partner. At the time, Minister of Economic Affairs Chii-ming Yiin said the government may invest less than 10 billion Taiwan dollars in Taiwan Memory.

But in an apparent protest to the government over what it said was an "unfair" decision, Formosa Plastics Group this month submitted a proposal seeking 20-30 billion Taiwan dollars for its memory-chip units, Nanya Technology and Inotera Memories Inc.

Inotera is a joint-venture between Nanya and U.S. chip-maker Micron Technology Inc.

Global DRAM makers have suffered from consecutive quarterly losses since last year after a supply glut drove chip prices well below their manufacturing costs. Prices have slowly rebounded this year after companies cut production and capital expenditure budgets. Many have sought help from their governments to ride out the DRAM sector's worst downturn since 2001.

Copyright Agence France-Presse, 2009

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