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.
SECURITY: As China is ‘reshaping’ Hong Kong’s population, Taiwan must raise the eligibility threshold for applications from Hong Kongers, Chiu Chui-cheng said When Hong Kong and Macau citizens apply for residency in Taiwan, it would be under a new category that includes a “national security observation period,” Mainland Affairs Council (MAC) Minister Chiu Chui-cheng (邱垂正) said yesterday. President William Lai (賴清德) on March 13 announced 17 strategies to counter China’s aggression toward Taiwan, including incorporating national security considerations into the review process for residency applications from Hong Kong and Macau citizens. The situation in Hong Kong is constantly changing, Chiu said to media yesterday on the sidelines of the Taipei Technology Run hosted by the Taipei Neihu Technology Park Development Association. With
CARROT AND STICK: While unrelenting in its military threats, China attracted nearly 40,000 Taiwanese to over 400 business events last year Nearly 40,000 Taiwanese last year joined industry events in China, such as conferences and trade fairs, supported by the Chinese government, a study showed yesterday, as Beijing ramps up a charm offensive toward Taipei alongside military pressure. China has long taken a carrot-and-stick approach to Taiwan, threatening it with the prospect of military action while reaching out to those it believes are amenable to Beijing’s point of view. Taiwanese security officials are wary of what they see as Beijing’s influence campaigns to sway public opinion after Taipei and Beijing gradually resumed travel links halted by the COVID-19 pandemic, but the scale of
A US Marine Corps regiment equipped with Naval Strike Missiles (NSM) is set to participate in the upcoming Balikatan 25 exercise in the Luzon Strait, marking the system’s first-ever deployment in the Philippines. US and Philippine officials have separately confirmed that the Navy Marine Expeditionary Ship Interdiction System (NMESIS) — the mobile launch platform for the Naval Strike Missile — would take part in the joint exercise. The missiles are being deployed to “a strategic first island chain chokepoint” in the waters between Taiwan proper and the Philippines, US-based Naval News reported. “The Luzon Strait and Bashi Channel represent a critical access
Pope Francis is be laid to rest on Saturday after lying in state for three days in St Peter’s Basilica, where the faithful are expected to flock to pay their respects to history’s first Latin American pontiff. The cardinals met yesterday in the Vatican’s synod hall to chart the next steps before a conclave begins to choose Francis’ successor, as condolences poured in from around the world. According to current norms, the conclave must begin between May 5 and 10. The cardinals set the funeral for Saturday at 10am in St Peter’s Square, to be celebrated by the dean of the College
RSS