TMC to buy less than 10% in Elpida

LAST DITCH EFFORT: The government-backed memory chip supplier was meant to bolster the nation’s shaky computer chip industry using infusions of taxpayer money


Sat, Jun 13, 2009 - Page 12

The government-backed memory chip supplier Taiwan Memory Co (TMC, 台灣記憶體公司) plans to buy less than a 10 percent share in Elpida Memory Inc after it picked Japan’s biggest memory chipmaker as its partner in making memory chips and developing new technologies two months ago, a government official said yesterday.

This will help TMC hit its first-stage target of obtaining technological support via equity investments, making it possible to build its own capacity by consolidating local computer memory chipmaker’s output next year as scheduled.

“TMC is planning to buy a less than 10 percent stake in Elpida in the initial phase,” said Woody Duh (杜紫軍), director general of the Ministry of Economic Affairs’ Industrial Development Bureau.

Duh confirmed a report by the Chinese-language Commercial Times yesterday about TMC’s interest in acquiring a stake in Elpida, but he declined to reveal details.

The newspaper said Premier Liu Chao-shiuan (劉兆玄) met and discussed the formation of the nation’s fifth memory chipmaker with TMC head John Hsuan (宣明智) and Minister of Economic Affairs Yiin Chii-ming (尹啟銘) on Thursday.

Liu may make a final decision on the government’s first capital infusion into TMC within two weeks, the report said.

Duh said TMC may apply directly for a government injection of NT$10 billion (US$305 million) from the National Development Fund (國發基金).

That amount is just one-third of the NT$30 billion TMC originally requested, allowing the government to hold as much as a 50 percent stake in the memory company.

Last week, Yiin said TMC was in talks with five to 10 potential investors in the information technology industry. TMC will begin operations in September after it finalizes its business plan next month at the earliest, Duh said.

That would match the government’s blueprint, unveiled in March, to form a state-owned memory company in six months. The government effort is a last resort to rejuvenate the nation’s shaky computer memory chip industry using taxpayer money.

Taiwanese computer memory chips have posted massive losses during the industry’s severe downturn as chip prices plunged on sagging demand amid economic recession and oversupply.

As of 6pm yesterday, prices for benchmark computer memory chips fell 2.99 percent to US$1.04 per unit, reversing previous gains, the pricing information posted on the Web site of market researcher DRAMeXchange Technology Inc’s (集邦科技) showed.