New TMC head opposes merger of DRAM makers

“Each company should solve its own financial problems,” he said.

Hsuan, vice chairman emeritus of United Microelectronics Corp., spoke to reporters in Hsinchu yesterday. During the news conference, Hsuan said TMC was a memory chip restructuring effort, not a merger or a bailout plan. The industry is currently suffering from its longest contraction in more than a decade.

“I oppose a merger of dynamic random-access memory (DRAM) manufacturers,” he said. “Right now there is an oversupply of idling capacity. A merger will only bring more such capacity. It will be a liability, not asset.”

“In addition, there may be a clash of company culture after a merger,” he added.

Hsuan pointed out in the short term, TMC will have no relevance to Taiwan's DRAM makers.

Separately, Hsuan said Taiwan Memory Co. may receive as much as NT$30 billion in state funds, Hsuan said.

“Many” foreign investors, including private equity firms, are interested in investing in Taiwan Memory, Hsuan, said. He declined to identify any potential investors.

Hsuan plans to discontinue Taiwan Memory if cumulative losses at the company exceed NT$15 billion, he said.

Responding to this, Chen Chao-yi, director general of the Industrial Development Bureau, Ministry of Economic Affairs, said the government hasn't decided how much money to put into the company.

It has to wait until the final organizational blueprint for the company is ready, he said.

“In principle, the government wishes to see more private funding going into this company,” he said. “If the government is to spend NT$30 billion, the private sector has to put more than NT$30 billion into the firm to reduce the government's holding to less than 50 percent.”

Taiwan Memory may team up with either Japan's Elpida Memory Inc. or U.S.-based Micron Technology Inc. on technological issues.

Hsuan said he plans to visit Elpida Memory Inc. and Micron Technology Inc. in two weeks to discuss patents and intellectual property.

He added TMC will make a final selection by March. The company will then recruit workers, he said.

“If those two goals can be achieved, I will see to it that TMC will be officially formed within two months,” he said. “We will finish making the final preparations by the end of Q3 next year and will join the memory chip battle in the Q4 next year.”

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