Shih Yen-shiang, vice economics minister, made the remarks at the Economic Committee meeting of the Legislative Yuan when asked by lawmakers how the government would do to help domestic DRAM makers survive the ongoing market slump.

At the meeting, Shih said international experts predicted that the global semiconductor market would be poised for recovery in mid-2009 at the earliest, and therefore domestic makers in the line should be able to tide over the predicament in the middle of next year.

He continued that the government will move to ease credit crunch plaguing domestic DRAM makers by offering them short-term revolving funds on the one hand, and will also help induce makers to make structural changes and enhance their own research and development capability on the other hand.

On the same occasion, Lawmaker Hsu Chung-hsiung of the ruling Kuomintang said that South Korea is the major competitor to Taiwan in the global semiconductor market, and the fact that the Korean won has depreciated by 30-40 percent against the U.S. dollar has continued a heavy pressure on the business operations of DRAM makers in Taiwan.

Hsu continued that given the shrinking global market demand and the high market share commanded by Taiwanese DRAM makers, it’s an overly optimistic expectation that Taiwan’s DRAM industry would rebound in the middle of next year.

The KMT lawmaker said quite a few domestic DRAM makers have great difficulty surviving the sharp excess in market supply, and the makers have recorded aggregate bank loans of NT$420 billion. Should they fall, then the impact on Taiwan would be much greater than that of the global financial tsunami, Hsu stressed.

Meanwhile, another KMT lawmaker Ting Shou-chung said that the sales of Taiwan-made DRAM products are already lower than their production costs as a result of the market glut.

Ting continued that the global DRAM market sales are expected to surge only one percent this year, and a negative growth of 3-4 percent is predicted for sales in 2009. Although the government decides to grant a helping hand to the makers, those firms whose assets have been swindled away or whose top executives have allegedly engaged in insider trading should be excluded.

At the same meeting, Chairman Chen Tain-chih of the Council for Economic Planning and Development Council (CEPD) said while the government will help domestic DRAM makers tide over their financial predicaments in the short term, it will also help makers engage in deep strategic alliance with leading international brands and step up structural changes to sharp their competitive edges in international markets.

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