The Ministry of Economic Affairs yesterday said a number of investors have expressed interest in buying a stake in a planned state-led holding company for computer memory chips.
“A variety of institutional investors approached us over possible investment. Some are based in Taiwan and others are from overseas,” said Chen Chao-yi (陳昭義), director-general of the ministry’s Industrial Development Bureau.
The bureau has been charged with developing a rescue plan for the local dynamic random access memory (DRAM) industry.
The ministry announced on Thursday it would form a new chip memory company called Taiwan Memory Co (TMC, 台灣記憶體公司) as it aims to solicit advanced technology from foreign companies while pushing industry consolidation among the nation’s cash-strapped DRAM makers.
Chen said venture capital companies were among the potential investors, but he said it was premature to name possible investors.
The ministry said the new company would be established within three to six months, with the government investing an unspecified amount of capital for a stake lower than 50 percent, probably via the National Development Fund.
The ministry, however, yesterday dismissed speculation that the government would pour in NT$70 billion (US$2 billion) of a NT$100 billion fund to jointly set up TMC along with other investors, a statement issued yesterday said.
Chen said the ministry would leave fund-raising to the appointed head of TMC, John Hsuan (宣明智), who is also tasked with selecting a foreign technological partner from either US chipmaker Micron Technology Inc or Japan’s Elpida Memory Inc.
Hsuan is a honorary vice chairman of the world’s second-largest contract chipmaker United Microelectronics Corp (UMC, 聯電), which has made memory chips including DRAM chips since the 1980s and now owns an 8 percent share of the nation’s No. 3 DRAM supplier, ProMOS Technologies Inc (茂德).
In the statement, the ministry said integrating local DRAM makers into TMC would be lower on Hsuan’s priority list.
While the ministry said in the statement it did not rule out pushing consolidation via merger and acquisition deals, Nanya Technology Corp (南亞科技) said it had not decided whether to join the government’s integration efforts via TMC, citing a lack of details about the new company.
Nanya Technology, a memory chip arm of Formosa Plastics Group (台塑集團), said on Thursday the company would not exit the DRAM market as it had signed a 10-year agreement with Micron to jointly develop technologies, an agreement that was confirmed yesterday.
“We don’t clearly know what the framework is, so we can’t discuss whether we would buy a stake or cooperate with them,” Nanya chairman Wu Chia-chau (吳嘉昭) said yesterday.
Uncertainty over whether TMC would adopt chip-manufacturing technology from Elpida or Micron is also holding Nanya back from making an investment decision, Wu said.
Shares of the nation’s major DRAM companies plunged by between 1.63 percent and 6.85 percent, with the nation’s top player Powerchip Semiconductor Corp (力晶半導體) falling limit-down to NT$3.81.
Shares of Nanya declined 5.78 percent to NT$6.03, while Inotera Memories Inc (華亞科技), a joint venture between Nanya and Micron, saw its shares drop 6.33 percent to NT$11.1.
“Supply and demand [will] remain an industry challenge and negotiations [will] take more time to bear fruit as the list of options hasn’t grown substantially,” SinoPac Securities Corp (永豐金證券) said in a note yesterday, citing analyst Sophie Chuang (莊孟紓).
Chuang said that ProMOS would be the major victim under the government’s reorganization plan. Shares of ProMOS dipped 1.63 percent to NT$1.21.
In Japan, Elpida’s shares fell the most in two weeks in Tokyo trading after the Nikkei Shimbun said a possible rescue package involving Taiwan’s government could be arranged later than the company had projected.
Elpida dropped 11 percent to close at ¥544 (US$5.60) on the Tokyo Stock Exchange, while the Nikkei 225 Stock Average fell 3.5 percent.
Elpida had hoped to gain a rescue package from Taiwan’s government by the end of the month, the Nikkei reported yesterday. The Tokyo-based company may seek capital assistance from the Japanese government now that the Taiwan-related plans may be delayed, the report said.
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