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MOEA rejects plan for DRAM sector, asks for revision

The Ministry of Economic Affairs (MOEA) has rejected an initial DRAM industry consolidation proposal submitted by Powerchip Semiconductor Corp (力晶半導體) and Rexchip Electronics Co (瑞晶) to obtain government aid.

In a press release issued on Tuesday evening, the ministry said “the bailout plan has not been approved because there is still a great chasm between what the MOEA and the public expect and what Powerchip and Rexchip can offer,” the note said.

Hence, the ministry is in talks with the companies on submitting a revised proposal as soon as possible.

Rexchip is a joint venture established in 2006 between Powerchip and Tokyo-based chipmaker Elpida.

Powerchip vice president and spokesman Eric Tang (譚仲民) yesterday said the MOEA’s reaction did not constitute a final “rejection.”

“We have been [asked] by the ministry to discuss the proposal further with our partners and come up with a more comprehensive and revised plan,” Tang said by telephone yesterday.

“Once we receive more detailed recommendations from the bureau in charge, we will convene with our partners, such as Elpida, at once and comply with the government’s recommendations,” he said.

Tang did not say when the revised proposal would be ready.

The ministry said the objectives delineated on Dec. 16 in a DRAM industry bailout plan had not changed and that it would work toward these goals, Eric Lu (呂正欽), section head of the Industrial Development Bureau’s information technology industries division, said by phone yesterday.

“In order for the government to endorse the bailout measures, the DRAM companies must first and foremost establish their technology roots in Taiwan,” Lu said. “Then they need to enhance their global competitiveness and ensure that the government’s investments will pay off.”

The ministry requires that local companies requesting more than NT$1 billion (US$30.50 million) in government aid submit restructuring plans to the legislature or allow a government-sponsored corporate rescue company to intervene in their business operations.
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