“It is a very difficult task,” he said.
Fubon Securities’ Lee believes there is still a chance for TMC to succeed. The company is also seeking partners in Taiwan’s DRAM supply chain to join its alliance with Elpida, which may strengthen the alliance’s power enough to compete with South Korean chip giant Samsung Electronics Co.
Nanya and its joint venture Inotera have not sought financial aid from the government since November, when the government first announced the possibility of rescuing DRAM makers. Nanya enjoys a relatively better financial structure and strong backing from its cash-rich parent company, Formosa Plastics Group (FPG, 台塑集團).
Things changed after the ministry announced a concrete NT$30 billion plan on July 22 to finance local DRAM firms and TMC is emerging as a potential competitor now that it has begun operations.
“We will submit our proposal jointly with Nanya by the Oct. 20 deadline ... We think we will meet all the government requirements,” said Charles Kau (高啟全), president of Inotera Memories Inc (華亞科技), a DRAM joint venture between Nanya and US memory chipmaker Micron Technology Inc.
Kau said the companies have not finalized the amount of investment from the government, but they will use part of the new capital to upgrade to 50-nanometer technology, the most advanced and cost-effective memory technology available, he said.
“We hope the government will invest in us. Its investment will greatly reduce our burden,” Pai said.
Local smaller players now need to choose sides between TMC and the FPG camp composed of Nanya, Inotera and Micron.
ProMOS said last month that it planned to spin off an advanced 12-inch plant, paving the way for a new partnership with TMC, while Winbond said it would welcome potential collaboration with TMC.
Going it alone, Powerchip said last week it planned to resume almost full production from Aug. 20 to grab business on the heels of a recent recovery.
Now that the government is beginning to pour in resources, analysts agreed that the nation’s DRAM landscape is changing. It is worth observing whether TMC will become a major force after consolidating Taiwan’s DRAM sector to compete with FPG.
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