The government may seek to attract private investors or financial institutions to inject funds into DRAM makers if the legislature vetoes an industry revitalization plan in the third reading, a minister said yesterday.
“If the National Development Fund doesn’t inject capital into the companies, private sector investment is one alternative,” Minister of Economic Affairs Shih Yen-shiang (施顏祥) told a press conference.
Another option is to follow Japan’s lead and allow financial institutions to invest in companies filing for restructuring or bankruptcy, he said.
But this would require the government to formulate regulations first, he said.
“DRAM players have borrowed as much as NT$300 billion [US$9.1 billion] from banks,” Shih said.
These manufacturers should consider integrations to create a foundation strong enough to weather economic downturns, he said.
On Nov. 11, lawmakers passed a resolution to ax the government’s plan to revitalize the DRAM industry, which has been hit hard by the financial crisis, saying that the right time to inject capital had passed and the government should not waste taxpayers’ money.
Among the three companies that applied for the capital funding — Taiwan Memory Co (TMC, 台灣創新記憶體公司), Powerchip Semiconductor Corp (力晶半導體) and Kaohsiung-based Taiwan Creative Lab (台灣創造力實驗室) — TMC was approved for an initial capital injection of NT$4.9 billion.
Meanwhile, the ministry said computer, retail and wholesale services would make up the services category of an early harvest list for a proposed economic cooperation framework agreement (ECFA) with China.
There are two major categories of trade — merchandise and services — on the list.
Merchandise would include tariff reductions on approximately 500 items. The services category would comprise computer, retail and wholesale services.
The ministry hopes that China will lower restrictions — including on capital and outlet numbers — for Taiwanese companies competing in the services market across the Strait.
Whether other service sectors — such as telecoms and finances — will be included on the list will depend on evaluations and recommendations from certain government agencies, Shih said.
Taipei is set to formally begin ECFA negotiations with Beijing next month and the pact is expected to be inked at the fifth round of cross-strait talks in the middle of next year.
In related news, the minister said he couldn’t reveal details concerning the potential lifting of a ban on panel, semiconductor and petrochemical companies expanding their investment in China.
“[Talking about this] would affect share prices of listed companies,” Shih said, adding that the matter was still being discussed between ministries and the ban would only be lifted if the legislature agreed.
Shih told the Chinese-language Apple Daily on Dec. 19 that panel makers would be allowed to invest in China by the first quarter at the earliest and semiconductor makers by the second quarter at the earliest.
All applications would be reviewed on a case by case basis. The change would stipulate that advanced technology must be based in Taiwan and investment in China must not exceed investment at home, he was quoted as saying.