Fri, Apr 10, 2009 - Page 1 News List

Nanya, Micron reject TMC plan

By Lisa Wang  /  STAFF REPORTER

Nanya Technology Corp (南亞科技), the nation’s second-largest maker of computer memory chips, and its US partner Micron Technology Inc said yesterday they would not team up with state-led Taiwan Memory Co (TMC, 台灣記憶體公司) to avoid potential technology leaks.

The announcement ended speculation about a possible four-way cooperation with TMC, which last week chose Japan’s Elpida Memory Inc as its technological partner.

But, Nanya and Micron yesterday urged the government to give them the same support it planned to give TMC, including a possible cash injection to accelerate technological migration.

TMC said last month it hoped for a NT$30 billion (US$888 million) capital injection from the government.

“Micron decided not to join the TMC under its current structure,” Fred Fishburn, an assistant vice president of Inotera Memories Inc (華亞科技), a joint venture between Nanya and Micron, told a press briefing in Taipei.

“Our biggest concern is technology contamination,” Fishburn told reporters. “We [would] risk losing technologies to Elpida.”

Furthermore, the companies doubt the framework proposed by TMC would work, he said.

Micron intends instead to increase cooperation with Inotera and Nanya on next-generation technologies and research and development efforts in Taiwan, Fishburn said.

Last year, Micron signed a 10-year agreement with Nanya on technological cooperation.

In response, TMC head John Hsuan (宣明智) said in a statement that the company respected the decision made by Micron and Nanya.

On April 1, Hsuan said TMC wanted additional technological support from Micron after picking Elpida as it technological partner.

Nanya chairman Wu Chia-chau (吳嘉昭) said he hoped the government would nevertheless support the chipmaker’s efforts as the government’s policy is to help memory companies enhance their competitiveness by developing their own technologies.

“If possible, we hope the government will subscribe to new shares of Nanya and Inotera,” Wu said.

The companies will decide the scale of new share issues at board meetings later this month, he said.

Nanya has said it would need between NT$20 billion and NT$30 billion per plant with a monthly capacity of 30,000 12-inch wafers to upgrade from 68-nanometer to more cost-effective 50-nanometer technology.

Nanya and Inotera plan to begin the migration in the third quarter of this year. Nanya said its capital spending this year would rise to nearly NT$20 billion from NT$12 billion last year.

Liu Szu-liang (劉思良), a memory industry analyst with Yuanta Securities and Investment Consulting (元大投顧), said Nanya would need the government’s help.

“Since the investment in developing new technologies will be huge, Nanya will need the government’s financial support to do it,” Liu said by phone yesterday. “The company’s constant losses have put its parent company, Formosa Plastics Group [台塑集團] under heavy financial pressure.”

Nanya accumulated NT$24.84 billion in losses in the first three quarters of last year after reporting NT$12.46 billion in losses in 2007.

Meanwhile, the Central News Agency reported that Minister of Economic Affairs Yiin Chii-ming (尹啟銘) said yesterday the ministry respected Micron’s decision.

Yiin declined to say whether the government would offer funds to Micron and Nanya.

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