Wed, Jan 07, 2009 - Page 12 News List

Government makes DRAM industry rescue a top priority

By Elizabeth Tchii  /  STAFF REPORTER, WITH BLOOMBERG

The Industrial Development Bureau (IDB, 經濟部工業局) Director-General Chen Chao-yi (陳昭義) told reporters yesterday that saving the nation’s DRAM industry was a top government priority.

“If we can spend NT$100 billion [US$3 billion] to save these global companies, it will be money well spent. If we let the industry collapse, it will take much more than NT$100 billion to create another globally competitive industry on the same scale,” Chen said.

To ensure the nation’s long-term competitiveness in cutting-edge technology, “the government is working with multiple departments as well as international counterparts to establish the nation’s intellectual property structure,” Chen said.

Local DRAM companies such as Powerchip Semiconductor Corp (力晶半導體) and Nanya Technology Corp (南亞科技) have recently joined foreign technology partners to request government financial aid as the industry has suffered from oversupply and a slowing global economy.

Chen said bureau officials were working closely with DRAM companies to help them preserve job opportunities for Taiwanese by encouraging factories to temporarily release some of their foreign workers.

“Many companies worry that once they let go of foreign hires, their quotas will be negatively affected,” Chen said.

In addition, Chen said the government was looking into ways to help DRAM firms dissolve their heavy inventory buildup. Using inventory as collateral for further credit was a possibility under discussion, he said.

Meanwhile, ProMOS Technologies Inc (茂德科技), Taiwan’s most unprofitable memory-chip maker, was granted an extension from local banks on the duration of its loans, a government official said.

The creditors won’t ask for repayment from ProMOS for six months, Chen told reporters yesterday at a briefing in Taipei.

ProMOS has US$300 million incorporate bonds due on Feb. 14, he said.

“The extension enables ProMOS to focus on finding solutions to pay its corporate bonds,” Chen said.

Memory-chip makers worldwide have cut production and sold assets to stave off a cash crunch after a glut caused prices to plunge. Taiwan’s five largest chipmakers posted NT$94.8 billion in losses in the first nine months of last year.

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