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Trade group says Taiwan's DRAM plan still unclear

Posted: 18 May 2009     Print Version  Bookmark and Share

Keywords:DRAM sector  DRAM industry consolidation  Taiwan's DRAM players  bail-out Taiwan 

According to a report by a U.S.-Taiwan lobbying group, the Taiwanese government plan to consolidate the island's DRAM industry around the government-backed Taiwan Memory Co. (TMC) remains unclear and could do more harm than good.

The U.S.-Taiwan Business Council said it welcomes the Taiwan government's intention to press DRAM industry consolidation. But the group said backing for TMC has waned and that TMC now appears to be waiting for some of Taiwan's DRAM players to fail so it can buy the infrastructure at bargain prices with loans provided by the government.

As part of its plan to bail-out Taiwan's loss ridden DRAM sector, the Taiwan government proposed consolidating all of the island's DRAM makers into a single company, TMC. Thus far the DRAM vendors have refused.

"Some form of consolidation needs to take place in order to achieve a healthy, sustainable and profitable DRAM sector in Taiwan, one that is able to reliably service the needs of its global clients," said Rupert Hammond-Chambers, president of the U.S.-Taiwan Business Council, in a statement.

But Hammond-Chambers added that Taiwan already has six DRAM companies and the addition of TMC makes it seven. He questioned whether enough DRAM businesses would fail to make space in the market for TMC.

"There is also no guarantee that TMC will win any bidding process for the choicest assets," Hammond-Chambers said. "This leaves its role unclear at best."

The report indicates that TMC will likely compete with the combination of U.S. memory maker Micron Technology Inc. and its joint venture partner, Nanya Technology, for the distressed assets of failing DRAM businesses. The challenge for the Taiwan government is to treat both efforts impartially and to allow each to play an equitable role in building Taiwan's DRAM sector, the report concludes.

-Dylan McGrath
EE Times

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