Thu, Apr 16, 2009 - Page 12 News List

Lawmakers unhappy over TMC

RIVAL A motion passed by the Economics Committee said the point of creating TMC was to help local DRAM makers, but instead TMC would become a competitor

STAFF WRITER, WITH BLOOMBERG

The legislature’s Economics Committee yesterday passed a motion requesting that the Ministry of Economic Affairs (MOEA) report to it on its policy relating to the dynamic random access memory (DRAM) industry.

The motion was proposed by Democratic Progressive Party (DPP) Legislator Pan Meng-an (潘孟安) and supported by Chinese Nationalist Party (KMT) legislators Ting Shou-chung (丁守中) and Lin Tsang-min (林滄敏).

The motion was in response to concerns that government-led Taiwan Memory Co (TMC, 台灣記憶體公司) might become a competitor to local DRAM makers instead of playing the supportive role initially envisioned by the government.

On Monday, Pan said he would block the government’s “stupid” plan to form TMC because it would not help local DRAM companies.

“I don’t know why they’re saying this,” Minister of Economic Affairs Yiin Chii-ming (尹啟銘) said in an interview. “The purpose of creating TMC is to obtain technology so that domestic chipmakers can reinvent themselves.”

TMC, set up by the government as part of efforts to reorganize the industry and halt record losses, named Elpida Memory Inc of Japan as a technology partner on April 1.

Yesterday’s motion said the point of creating TMC was to establish a cooperative relationship with the local DRAM makers, but instead TMC will become the seventh DRAM company in Taiwan, competing with already struggling firms.

TMC is expected to request NT$30 billion in state funding from the National Development Fund (國發基金).

Lawmakers also expressed concerns that they would not be able to monitor TMC’s operations because the government planned to hold a stake of less than 50 percent in the venture, which would exempt TMC from direct legislative review.

The committee said the MOEA should report to it on the outlook and development of the nation’s DRAM industry and TMC’s business plans.

Although the government can use the National Development Fund to invest in TMC without the approval of lawmakers, legislators can threaten to cut government budgets as a deterrent, Pan said.

Lin, of the KMT, said his caucus was still considering whether to support TMC.

Considering the lack of details about TMC’s plans, it is “understandable” that some lawmakers have not endorsed it, he said.

“The government should scrap TMC,” said Kevin Yang (楊師銘), who manages US$150 million as chief investment officer of Paradigm Asset Management Co (華頓投信). “The memory-chip industry burns money and what it needs is money — of which TMC does not have enough — so it doesn’t solve the problem.”

Japan’s Trade Ministry said yesterday it supported the bid by Elpida, the country’s biggest maker of computer memory chips, to team up with TMC.

During a visit to Taiwan on Tuesday, Masaaki Kimura, deputy director-general of the ministry’s commerce and information policy bureau, told government officials that his country supported the alliance, said Minoru Tsukigata, a spokesman at the bureau’s information and communication electronics division.

Japanese public broadcaster NHK reported that Kimura told the officials Japan planned to inject public funds into Elpida.

Last Thursday, Nanya Technology Corp (南亞科技), the nation’s second-largest maker of computer memory chips, and its US partner Micron Technology Inc said they would not team up with TMC.

Also See: Price of memory chips rises again

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