Taiwan invests NT$30 billion in DRAM firms

July 22, 2009 | 10:03

Tags: #credit-crunch #dram #tmc

Companies: #taiwan

The Taiwanese government is hoping to prop up its local DRAM industry – currently suffering from the effects of the economic downturn – with a stimulus package of at least NT$30 billion (£557 million).

As reported by PC World, the manufacturers are in financial trouble thanks to the global credit crunch – with sales down, the companies are finding themselves attempting to sell stock which has suddenly reduced in value to an over-saturated market. While there's no reason to believe that the market conditions won't pick up again, the companies will need a bit of aid to help them in the short term.

The government is insisting on a six month process, with companies hoping to get their hands on the funds being asked to complete a proposal – including details on any planned mergers and acquisitions should the money be granted along with the particulars of any deals with foreign companies – within the next three months. Following the receipt of the proposals, the government will carve up the funds within three months.

The money – which the government has said represents investment capital rather than a loan – won't come without strings attached, however: one of the rules states that in order to get a share of the funds, any Taiwanese DRAM manufacturer in partnership with a foreign company should ensure that their contract gives them full rights to use jointly developed technologies without being hindered by patent law. With such a rule on the table companies with foreign partners – such as the Taiwan Memory Company, which already has a partnership agreement with Japanese memory specialist Elpida – may find themselves shut out from funding unless they are able to negotiate a particularly keen deal.

The investment package is sorely needed: DRAM manufacturing and development represents a key portion of the gross national product of Taiwan, and in the last year the big five companies – TMC, Powerchip Semiconductor, ProMOS, Winbond, and Nanya Technology – made a combined net loss of NT$159.49 billion (£2.9 billion) – a four-fold increase year on year.

Are you pleased to see the Taiwanese government doing something to keep its DRAM industry afloat, or were you hoping that desperation might bring rock-bottom memory price still lower? Share your thoughts over in the forums.
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