Taiwan unlikely to bail out memory makers

IT’S LOOKING LIKE Taiwan will not be rushing to the aid of its DRAM firms with Santa-style sacks full of bailout money any time soon.

For Taiwan’s floundering DRAM makers, whether they’ve been naughty or nice will have no consequence it seems. Taiwan's top lawmakers have already petitioned the folks down in the state planners office under Taiwan’s Council of Economic Planning and Development (CEPD) to push for consolidation in the memory industry.

The CEPD chairman himself, Chen Tain-jy noted some sort of consolidation would absolutely have to occur, but that at the same time, the CEPD would try to funnel some cash into those DRAM makers who could more feasibly develop home-grown technologies and stay competitive in the tough times ahead. Cue the cries of “Me! Me! Pick me!”.

For Taiwanese memory makers, the disappointment will be tangible, as many had expected the government to don its cape and spring to their aid in the form of a direct financial bailout. But it seems the hole is just too deep for even the government to fill.

The DRAM sector is currently the biggest tech loser of them all in Taiwan, with the four biggest local DRAM makers, Powerchip Semiconductor, Nanya Technology, Inotera Memories and ProMOS Technologies, managing to collectively post losses of some $1.1 billion in Q3 this year, adding to the $2.7 billion in losses accumulated through the first half of 2008.

Taking the worst hit is ProMOS Technologies, which will find itself in a rather sticky situation come February 14, the date it's due to cough up for a rather substantial sum in corporate bonds.

Few in Taiwan disagree the memory industry must survive, but many are beginning to realise that the government doesn’t necessarily need to fight to keep as many as five DRAM makers afloat.

The industry may as well consolidate and leave one or two big DRAM makers to boost the country’s memory industry in the future, and weather the current economic storm. µ

L'Inq
DodgyTimes

See Also
Taiwanese government mulls DRAM bailout plan