US targets memory chip makers over subsidies

THE US GOVERNMENT is considering threatening Taiwan with trade sanctions over the huge wodges of cash it has given its ailing DRAM industry.

According to Digitimes, the US government has pledged to press Japan and Taiwan over their subsidies to Japan-based Elpida Memory.

The government rustled up a response after US memory manufacturer Micron got on the blower about the Elpida subsidy.

US Trade Representative Ron Kirk promised in a letter to Senator Mike Crapo to use World Trade Organisation (WTO) sessions to "exert pressure" over the subsidies.

TMC, which has chosen Elpida as its technology partner to overhaul Taiwan's DRAM industry, is not saying anything about the claims.

Taiwan's Ministry of Economic Affairs recently confirmed an application for government funding by TMC but did not release the amount. TMC wanted a ten per cent slice of Elpida.

Micron is worried that if the Japanese and Taiwanese governments give Elpida cash to advance its technology then it might increase its market share. That would be bad for Micron which probably had hoped to see loss-making Elpida close down.

Micron is the fourth largest DRAM vendor with 13.9 per cent global market share, trailing Samsung Electronics with 34.1 per cent, Hynix Semiconductors with 21.7 per cent and Elpida with 16.5 per cent.

Taiwan is likely to listen to the US. It has a mainland neighbour that might want to lob fireworks into its back yard if it does not have a big superpower to back it up. µ