Taiwan Lawmakers Reject Funding of DRAM Chip Firm

Government called plan a waste of taxpayers' money

On Nov. 11 Taiwan's lawmakers rejected a proposal to fund a government firm aimed at consolidating the island's ailing memory-chip industry, casting doubt on the project's future.

The Taiwan Innovation Memory Company's initial request of 4.9 billion Taiwan dollars (US$154 million) from the government was turned down by the parliament's economic committee, which called it a waste of taxpayers' money.

"With the major chip makers in heavy debts and DRAM prices bound to keep falling, this won't be a money-making investment for the government," said lawmaker Shyu Jong-shyoung, who chairs the committee. "It's going to be an endless hole and we will simply be wasting taxpayers' money," he said..

This was part of the committee's decision to put the brakes on the economic ministry's "restructuring scheme" for the local DRAM (dynamic random access memory chip) industry, he added.

The government announced in March that it would set up the company in a bid to develop next-generation chip technologies to increase the island's competitiveness. The firm, which was later renamed to TIMC, had selected Japan's Elpida Memory Inc. as its technology partner.

Taiwan's government has previously said it planned to invest up to 30 billion Taiwan dollars in local memory chip makers that could carry out restructuring plans to boost the competitiveness of the local DRAM industry.

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 in the sector's worst downturn since 2001.

Copyright Agence France-Presse, 2009

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