The government will take action if needed to help domestic DRAM companies, the Ministry of Economic Affairs said yesterday as it sought to assuage fears over the impact of Elpida Memory Inc’s filing for bankruptcy protection in Japan on Monday.
The ministry said in a statement that to ensure stability and continued development for the DRAM industry, government agencies would closely monitor how Tokyo-based Elpida would undergo a court-led reorganization.
Meanwhile, the Taiwan Stock Exchange (TWSE) said it would delist Elpida stock — in the form of Taiwan Depositary Receipts (TDR) — on March 28, following the Tokyo Stock Exchange’s announcement on Monday that it was delisting Elpida’s shares on the Tokyo bourse that day.
Elpida TDRs will be banned from margin trading on the local bourse when the market reopens today after a four-day holiday, meaning all transactions will have to be conducted in cash, the stock exchange said in a separate statement.
Shares of Elpida dropped 23.95 percent to close at ￥254 in Tokyo yesterday. Its TDR ended 6.9 percent lower at NT$7.02 in Taipei on Friday last week.
The ministry and the Financial Supervisory Commission held an emergency meeting yesterday, one day after Elpida filed a petition for corporate reorganization proceedings with the Tokyo District Court to seek protection from creditors for ￥448.03 billion (US$5.53 billion) in debt as of March 31 last year.
Elpida operates a 12-inch fab in Hiroshima, Japan, with a monthly capacity of 120,000 wafers. Its Taiwanese subsidiary, Rexchip Electronics Inc (瑞晶電子), also operates a 12-inch fab with a monthly capacity of 85,000 wafers.
In a statement issued on Monday, Elpida blamed the company’s demise on “the record-breaking strong yen against the US dollar, and the steep fall of the price of DRAM products [because of] fiercer competition in the DRAM industry.”
Sluggish demand for DRAM chips from its customers hurt by the flooding in Thailand last year was another factor behind the company’s failure, it added.
While Elpida said it did not plan to exit the DRAM business and was aiming for restructuring under the Tokyo court’s supervision, Taiwanese companies should take responsive measures to protect their interests in terms of accounts receivable and other issues with the Japanese firm, the ministry said.
Domestic downstream companies should also diversify their sources of supply, the ministry said, as analysts forecast a near-term price spike in memory chips.
“DRAM prices will likely rise (albeit slowly) due to supply shortages,” Samsung Securities’ Seoul-based analysts MS Huang and Eric Yoo said in a note yesterday.
“We expect DRAM prices to stage a mild recovery from the second quarter,” Daiwa Capital Markets analyst Jae H. Lee said in a note on Monday.
The ministry downplayed concern that Elpida’s demise could adversely impact Taiwanese firms that rely on the Japanese company for technology support.
Elpida has made the transition to 30-nanometer (nm) process as its main technology starting this year and is nearing completion of its migration to 25nm process technology.
“There are no such concerns in the near to medium term because Taiwanese firms that have entered into technology cooperations with Elpida have embarked on 3X-nanometer process and are ready to begin mass production,” it said.
SLOW-MOVING STORM: The typhoon has started moving north, but at a very slow pace, adding uncertainty to the extent of its impact on the nation Work and classes have been canceled across the nation today because of Typhoon Krathon, with residents in the south advised to brace for winds that could reach force 17 on the Beaufort scale as the Central Weather Administration (CWA) forecast that the storm would make landfall there. Force 17 wind with speeds of 56.1 to 61.2 meters per second, the highest number on the Beaufort scale, rarely occur and could cause serious damage. Krathon could be the second typhoon to land in southwestern Taiwan, following typhoon Elsie in 1996, CWA records showed. As of 8pm yesterday, the typhoon’s center was 180km
STILL DANGEROUS: The typhoon was expected to weaken, but it would still maintain its structure, with high winds and heavy rain, the weather agency said One person had died amid heavy winds and rain brought by Typhoon Krathon, while 70 were injured and two people were unaccounted for, the Central Emergency Operation Center said yesterday, while work and classes have been canceled nationwide today for the second day. The Hualien County Fire Department said that a man in his 70s had fallen to his death at about 11am on Tuesday while trimming a tree at his home in Shoufeng Township (壽豐). Meanwhile, the Yunlin County Fire Department received a report of a person falling into the sea at about 1pm on Tuesday, but had to suspend search-and-rescue
RULES BROKEN: The MAC warned Chinese not to say anything that would be harmful to the autonomous status of Taiwan or undermine its sovereignty A Chinese couple accused of disrupting a pro-democracy event in Taipei organized by Hong Kong residents has been deported, the National Immigration Agency said in a statement yesterday afternoon. A Chinese man, surnamed Yao (姚), and his wife were escorted by immigration officials to Taiwan Taoyuan International Airport, where they boarded a flight to China before noon yesterday, the agency said. The agency said that it had annulled the couple’s entry permits, citing alleged contraventions of the Regulations Governing the Approval of Entry of People of the Mainland Area into the Taiwan Area (大陸地區人民進入台灣地區許可辦法). The couple applied to visit a family member in
CELEBRATION: The PRC turned 75 on Oct. 1, but the Republic of China is older. The PRC could never be the homeland of the people of the ROC, Lai said The People’s Republic of China (PRC) could not be the “motherland” of the people of the Republic of China (ROC), President William Lai (賴清德) said yesterday. Lai made the remarks in a speech at a Double Ten National Day gala in Taipei, which is part of National Day celebrations that are to culminate in a fireworks display in Yunlin County on Thursday night next week. Lai wished the country a happy birthday and called on attendees to enjoy the performances and activities while keeping in mind that the ROC is a sovereign and independent nation. He appealed for everyone to always love their
RSS