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Nanya mulls government fund offer

Nanya Technology Corp (南亞科技), the nation’s biggest computer memory chipmaker, said yesterday that company executives would meet today to decide whether it would submit a proposal asking for government financial assistance for a technological upgrade ahead of a coming deadline.

Three months ago, the Ministry of Economic Affairs unveiled a much-anticipated plan to rescue the nation’s dynamic random access memory (DRAM) industry from the brink of collapse through financial support.

Tomorrow is the deadline for local DRAM companies to send their proposal for public funding.

Taoyuan-based Nanya is widely seen as the major and only competitor of government-backed Taiwan Memory Co (TMC, 台灣創新記憶體公司), vying for a share of state funds as it will need as much capital as possible to fund a technological migration to new-generation 50-nanometer technology.

“We have yet to reach a final decision. We will hold meetings tomorrow [Oct. 19] for further discussions after I come back to Taiwan,” Nanya Technology spokesman Pai Pei-lin (白培霖) said by telephone. Pai was on a business trip to Beijing yesterday.

TMC recently submitted its business plan to the ministry and requested a NT$5 billion (US$155 million) capital injection from the government, half the original estimate, the ministry said.

Two months ago, Pai said Nanya would submit a proposal in collaboration with Micron Technology AG before the deadline. The company has been in discussions with ministry officials to ensure it met all requirements.

The chipmaker now seems unsure, however, about whether obtaining a small amount of capital by the government in exchange for consolidating capacity with local DRAM firms — as requested by the government — is the best choice.

Some chipmakers, including Nanya, have begun making money after DRAM prices rebounded above cost levels.

Spot prices bounced back to US$2.4 per unit, something unseen in the past 18 months, DRAMeXchange Technology Inc (集邦科技) said.

Initially, Nanya had planned to use government funds on technological migration.

It would take less than NT$20 billion for Nanya to upgrade its 68-nanometer technology to 50-­nanometer, allowing it to make new DDR3 DRAM chips at lower costs, the company said.

In June, Nanya raised NT$12.22 billion by issuing 1 billion new shares, mostly subscribed by fellow Formosa Plastics Group (台塑集團) companies to buy new equipment for technological migration and to repay debts. Nanya could issue 800 million shares to raise more funds.
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