Lawmakers blank minister's TIMC appeal

The economics committee of the legislature rejected a request by the Ministry of Economic Affairs (MOEA) for the National Development Fund to invest in the TIMC, demanding the government drop the DRAM industry restructuring plan.

Shih yesterday delivered a special report to the economics committee of the legislature to appeal 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 from the TIMC.

He said 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, with the remainder to be sourced from the private sector.

During the economics committee session, lawmaker Lee Ching-hua of the ruling Kuomintang said that now that the local DRAM industry has managed to endure the worst, it was not necessary for the government to use tax payments by local people to save the DRAM industry, let alone the TIMC.

Another KMT lawmaker Ting Shou-chung said what the government should do is to restructure the entire industrial sector, not the DRAM industry, and the government investment in TIMC alone is virtually to create another black hole for losing money.

Lawmaker Pan Meng-an of the opposition DPP called for the economics ministry not to challenge the resolution made by the legislature after being pressured by local DRAM makers to do so.

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 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 to 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.

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