News Videos
International Edition


May 27, 2017

Breaking News, World News and Taiwan News.
About Us
Contact Us

Government plans to invest NT$8.1 billion in TIMC

TAIPEI, Taiwan -- Minister of Economic Affairs Shih Yen-hsiang said Monday that although the global DRAM market is picking up, the government still plans to invest NT$8.1 billion in a state-backed chipmaker to help restructure the DRAM industry.

The legislature earlier this month rejected a request by the economics ministry for the National Development Fund to invest in Taiwan Innovation Memory Co.(TIMC).

However, in a report to the legislature Monday, Shih appealed for a revival of the plan, saying it would be difficult for local DRAM companies to keep paying high technology licensing fees unless the industry can obtain vital technology through TIMC.

He explained that the TIMC would require total capital of NT$18 billion, and that the government plans to invest NT$8.1 billion -- 45 percent of the total. The rest will be raised from the private sector, he said.

According to the report prepared by the economic ministry, the TIMC funding project will be carried out in two phases. In the first phase, investments will total NT$11 billion, with the government putting in NT$4.9 billion, Shih said. In the second phase, NT$7 billion will be required and the government's input will be NT$3.2 billion, he added.

The government would have the option of buying fewer shares in the second phase if it wants to cut back on its stake in the company, he said.

The Ministry of Economic Affairs (MOEA) also said it plans to list TIMC in Taiwan and on overseas stock exchanges, once the company meets all operational and profit criteria for stock listing. At the same time, the National Development Fund would be able gradually reduce its stake in TIMC, he said.

Shih pointed that while the DRAM industry is a key pillar of the country's semiconductor industry, the total liabilities of local DRAM companies amounted to NT$420 billion, with NT$270 billion in bank loans. The industry also employs over 23,000 people, he noted, stressing the need to keep the restructuring plan alive.

The MOEA said it has invited experts to review the restructuring plan and has asked the Executive Yuan to approve the proposed 45 percent government stake in the company on condition that TIMC and Japan-based Elpida Memory first sign a technology licensing contract and form a cross-shareholding alliance.

Elpida Memory has made a commitment to allow the use of its technology in the company, which has yet to begin operations, and the Executive Yuan has approved the proposal for the National Development Fund to invest NT$4.9 billion in TIMC in the first phase.

The government had hoped that TIMC would secure badly needed core technologies and bring together some of the sectors' big players, including Powerchip Semiconductor, ProMOS Technologies, and Rexchip Electronics.

Taiwan's DRAM industry has been bleeding money over the past two years because of overcapacity and a slump in demand. It boasts six of the world's top 10 DRAM manufacturers but holds a global market share of only 15 percent.

In an effort to help local chip makers obtain core technologies and expand markets in the face of heavy competition from South Korea, the Taiwan government devised the TIMC project earlier this year, under which the government would pool the resources of local DRAM companies and their foreign technology partners to develop even more sophisticated DRAM technologies.

The legislature's Economics Committee, however, passed a resolution in early November demanding that the government give up its TIMC investment project and DRAM industry restructuring plan.

Write a Comment
CAPTCHA Code Image
Type in image code
Change the code
 Receive our promos
 Respond to this email
Subscribe  |   Advertise  |   RSS Feed  |   About Us  |   Career  |   Contact Us
Sitemap  |   Top Stories  |   Taiwan  |   China  |   Business  |   Asia  |   World  |   Sports  |   Life  |   Arts & Leisure  |   Health  |   Editorial  |   Commentary
Travel  |   Movies  |   TV Listings  |   Classifieds  |   Bookstore  |   Getting Around  |   Weather  |   Guide Post  |   Student Post  |   Terms of Use  |   Sitemap
  chinapost search