Taiwan's dynamic random access memory (DRAM) chip manufacturers are fighting an uphill battle for survival as prices continue to slump, officials at Taiwan Ratings Corp (
Taiwan Ratings associate director Tony Tsai (蔡東松) said several DRAM makers here may encounter liquidity shortfalls in the first half of next year if product prices continue to fall and if DRAM makers are unable to attract fresh finance.
"We expect to see the fate of some cash-strapped DRAM makers unfold between January and June next year if the current situation fails to improve."
Currently, Taiwan has five DRAM makers -- Mosel Vitelic Inc (茂矽電子), Winbond Electronics Corp (華邦電子), Powerchip Semiconductor Corp (力晶半導體), Nanya Technology Corp (南亞科技) and Promos Technologies Inc (茂德科技) -- which all suffered operating losses ranging from NT$1 billion (US$28.95 million) to almost NT$5 billion in the first half of this year.
Tsai said some of these companies would need to pay back corporate bond issues in the first half of next year, further pressuring their cash positions.
The industry weakness has made it more difficult for DRAM makers to secure bank loans or raise funds through overseas issues, he added.
Taiwan's DRAM makers face great difficulty in competing against foreign counterparts because they are much smaller in size, market share and lack research development capabilities, Tsai said.
Each Taiwan DRAM maker's global market share stands below five percent, compared with Samsung's 20 percent and Micron's 16 percent, he noted.
As many companies are mainly concentrated on DRAM production and depend heavily on technology transfers from overseas manufacturers, their technologies and manufacturing abilities would be seriously affected once their overseas partners decide to withdraw from such production, he said.
Oversupply in capacity utilization of DRAM makers is likely to continue and add pressure on companies' cash position and credit quality, unless manufacturers effectively cut back production or certain key suppliers withdraw from the market, Tsai said.
The price trend of DRAM chips, the consolidation of major players in Japan, South Korea and Europe, and PC demand following the introduction of Windows XP operation system and Intel's Pentium 4 processor would be crucial to the credit risks of local DRAM companies in the coming year, according to Taiwan Ratings.
A Chinese freighter that allegedly snapped an undersea cable linking Taiwan proper to Penghu County is suspected of being owned by a Chinese state-run company and had docked at the ports of Kaohsiung and Keelung for three months using different names. On Tuesday last week, the Togo-flagged freighter Hong Tai 58 (宏泰58號) and its Chinese crew were detained after the Taipei-Penghu No. 3 submarine cable was severed. When the Coast Guard Administration (CGA) first attempted to detain the ship on grounds of possible sabotage, its crew said the ship’s name was Hong Tai 168, although the Automatic Identification System (AIS)
An Akizuki-class destroyer last month made the first-ever solo transit of a Japan Maritime Self-Defense Force ship through the Taiwan Strait, Japanese government officials with knowledge of the matter said yesterday. The JS Akizuki carried out a north-to-south transit through the Taiwan Strait on Feb. 5 as it sailed to the South China Sea to participate in a joint exercise with US, Australian and Philippine forces that day. The Japanese destroyer JS Sazanami in September last year made the Japan Maritime Self-Defense Force’s first-ever transit through the Taiwan Strait, but it was joined by vessels from New Zealand and Australia,
SECURITY: The purpose for giving Hong Kong and Macau residents more lenient paths to permanent residency no longer applies due to China’s policies, a source said The government is considering removing an optional path to citizenship for residents from Hong Kong and Macau, and lengthening the terms for permanent residence eligibility, a source said yesterday. In a bid to prevent the Chinese Communist Party (CCP) from infiltrating Taiwan through immigration from Hong Kong and Macau, the government could amend immigration laws for residents of the territories who currently receive preferential treatment, an official familiar with the matter speaking on condition of anonymity said. The move was part of “national security-related legislative reform,” they added. Under the amendments, arrivals from the Chinese territories would have to reside in Taiwan for
CRITICAL MOVE: TSMC’s plan to invest another US$100 billion in US chipmaking would boost Taiwan’s competitive edge in the global market, the premier said The government would ensure that the most advanced chipmaking technology stays in Taiwan while assisting Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) in investing overseas, the Presidential Office said yesterday. The statement follows a joint announcement by the world’s largest contract chipmaker and US President Donald Trump on Monday that TSMC would invest an additional US$100 billion over the next four years to expand its semiconductor manufacturing operations in the US, which would include construction of three new chip fabrication plants, two advanced packaging facilities, and a research and development center. The government knew about the deal in advance and would assist, Presidential
RSS