Taiwan is playing a pivotal role in a growing trend for Japanese companies to move production overseas to shield their operations against the risk of disaster after the March 11 earthquake and tsunami devastated Japan’s industrial heartland.
Japanese companies are being forced to liberalize their long-term protectionist policies as they build up overseas manufacturing sites by exporting core technologies, because doing so poses less of a risk to their survival than natural disasters and a strengthening yen, not to mention the deteriorating DRAM industry.
The government should stop daydreaming about gaining control of the world’s DRAM chip market by developing its own DRAM technologies through collaboration with foreign strategic partners such as Elpida Memory Inc, Japan’s biggest memorychip maker. Elpida’s local partners Powerchip Technology Corp and ProMOS Technologies Inc are already exiting the market.
On Saturday, the Ministry of Economic Affairs said it had approved a “landmark” proposal from Elpida to invest billions of NT dollars to set up a research and development center in central Taiwan to develop next-generation technology for DRAM chip manufacturing in Taiwan and Japan.
“This facility will be the first R&D center Elpida has launched overseas,” a government official told the Taipei Times. “Discussions on its establishment started in the second half of last year. However, Elpida decided to speed up the process in March” after the earthquake.
As part of the project, Elpida also agreed to allow local partners to make chips using the same advanced technology its Japanese plants would use, when migrating to next-generation process technology, or 30-nanometer technology, the official said.
“Through this project, Taiwanese DRAM companies will be able to develop their own technologies and save some [royalty] costs,” the official said.
It seems that the Elpida plan is a resumption of the government’s failed effort to revive the nation’s shaky DRAM sector, especially as ProMOS faces insolvency, with banks considering blocking the chipmaker’s proposal to sell new shares to pay part of its NT$60 billion (US$2.02 billion) outstanding loans.
Since 2002, about 32 foreign companies, including US chip giant Intel Corp and PC maker Dell Inc, have set up 50 research and development centers in Taiwan, but these centers still failed to propel Taiwanese chipmakers or PC makers to global success.
Taiwan is just one part of the world’s industrial food chain, and Elpida is planning to build a research and development center here simply because it needs to better utilize local factories, owned by either itself or local chipmakers, to counter operational risks caused by the wobbly US economy and the eurozone debt crisis, which have cut chip demand and exacerbated DRAM overcapacity.
That is why Elpida announced on Thursday that it was considering shifting some production to Taiwanese subsidiary Rexchip Electronics Corp from its Hiroshima plant as part of a broader plan to tackle the deteriorating DRAM market and a stronger yen.
Eplida owns a 63 percent stake in Rexchip, while Powerchip holds less than 30 percent.
Powerchip and ProMOS are merely factories that Elpida can use whenever it needs without facing the operational risk it does in Japan. Elpida is now Powerchip’s sole DRAM client.
The government must face the facts. Taiwan’s role in the world’s DRAM market is diminishing and it wasted its last chance to do anything about that in the latest industrial slump.
Could Asia be on the verge of a new wave of nuclear proliferation? A look back at the early history of the North Atlantic Treaty Organization (NATO), which recently celebrated its 75th anniversary, illuminates some reasons for concern in the Indo-Pacific today. US Secretary of Defense Lloyd Austin recently described NATO as “the most powerful and successful alliance in history,” but the organization’s early years were not without challenges. At its inception, the signing of the North Atlantic Treaty marked a sea change in American strategic thinking. The United States had been intent on withdrawing from Europe in the years following
My wife and I spent the week in the interior of Taiwan where Shuyuan spent her childhood. In that town there is a street that functions as an open farmer’s market. Walk along that street, as Shuyuan did yesterday, and it is next to impossible to come home empty-handed. Some mangoes that looked vaguely like others we had seen around here ended up on our table. Shuyuan told how she had bought them from a little old farmer woman from the countryside who said the mangoes were from a very old tree she had on her property. The big surprise
The issue of China’s overcapacity has drawn greater global attention recently, with US Secretary of the Treasury Janet Yellen urging Beijing to address its excess production in key industries during her visit to China last week. Meanwhile in Brussels, European Commission President Ursula von der Leyen last week said that Europe must have a tough talk with China on its perceived overcapacity and unfair trade practices. The remarks by Yellen and Von der Leyen come as China’s economy is undergoing a painful transition. Beijing is trying to steer the world’s second-largest economy out of a COVID-19 slump, the property crisis and
Ursula K. le Guin in The Ones Who Walked Away from Omelas proposed a thought experiment of a utopian city whose existence depended on one child held captive in a dungeon. When taken to extremes, Le Guin suggests, utilitarian logic violates some of our deepest moral intuitions. Even the greatest social goods — peace, harmony and prosperity — are not worth the sacrifice of an innocent person. Former president Chen Shui-bian (陳水扁), since leaving office, has lived an odyssey that has brought him to lows like Le Guin’s dungeon. From late 2008 to 2015 he was imprisoned, much of this