The government will take action if needed to help domestic DRAM companies, the Ministry of Economic Affairs said yesterday as it sought to assuage fears over the impact of Elpida Memory Inc’s filing for bankruptcy protection in Japan on Monday.
The ministry said in a statement that to ensure stability and continued development for the DRAM industry, government agencies would closely monitor how Tokyo-based Elpida would undergo a court-led reorganization.
Meanwhile, the Taiwan Stock Exchange (TWSE) said it would delist Elpida stock — in the form of Taiwan Depositary Receipts (TDR) — on March 28, following the Tokyo Stock Exchange’s announcement on Monday that it was delisting Elpida’s shares on the Tokyo bourse that day.
Elpida TDRs will be banned from margin trading on the local bourse when the market reopens today after a four-day holiday, meaning all transactions will have to be conducted in cash, the stock exchange said in a separate statement.
Shares of Elpida dropped 23.95 percent to close at ￥254 in Tokyo yesterday. Its TDR ended 6.9 percent lower at NT$7.02 in Taipei on Friday last week.
The ministry and the Financial Supervisory Commission held an emergency meeting yesterday, one day after Elpida filed a petition for corporate reorganization proceedings with the Tokyo District Court to seek protection from creditors for ￥448.03 billion (US$5.53 billion) in debt as of March 31 last year.
Elpida operates a 12-inch fab in Hiroshima, Japan, with a monthly capacity of 120,000 wafers. Its Taiwanese subsidiary, Rexchip Electronics Inc (瑞晶電子), also operates a 12-inch fab with a monthly capacity of 85,000 wafers.
In a statement issued on Monday, Elpida blamed the company’s demise on “the record-breaking strong yen against the US dollar, and the steep fall of the price of DRAM products [because of] fiercer competition in the DRAM industry.”
Sluggish demand for DRAM chips from its customers hurt by the flooding in Thailand last year was another factor behind the company’s failure, it added.
While Elpida said it did not plan to exit the DRAM business and was aiming for restructuring under the Tokyo court’s supervision, Taiwanese companies should take responsive measures to protect their interests in terms of accounts receivable and other issues with the Japanese firm, the ministry said.
Domestic downstream companies should also diversify their sources of supply, the ministry said, as analysts forecast a near-term price spike in memory chips.
“DRAM prices will likely rise (albeit slowly) due to supply shortages,” Samsung Securities’ Seoul-based analysts MS Huang and Eric Yoo said in a note yesterday.
“We expect DRAM prices to stage a mild recovery from the second quarter,” Daiwa Capital Markets analyst Jae H. Lee said in a note on Monday.
The ministry downplayed concern that Elpida’s demise could adversely impact Taiwanese firms that rely on the Japanese company for technology support.
Elpida has made the transition to 30-nanometer (nm) process as its main technology starting this year and is nearing completion of its migration to 25nm process technology.
“There are no such concerns in the near to medium term because Taiwanese firms that have entered into technology cooperations with Elpida have embarked on 3X-nanometer process and are ready to begin mass production,” it said.
GEARING UP: An invasion would be difficult and would strain China’s forces, but it has conducted large-scale training supporting an invasion scenario, the report said China increased its military pressure on Taiwan last year and took other steps in preparation for a potential invasion, an annual report published by the US Department of Defense on Wednesday showed. “Throughout 2023, Beijing continued to erode longstanding norms in and around Taiwan by employing a range of pressure tactics against Taiwan,” the report said, which is titled “Military and Security Developments Involving the People’s Republic of China (PRC) 2024.” The Chinese People’s Liberation Army (PLA) “is preparing for a contingency to unify Taiwan with the PRC by force, if perceived as necessary by Beijing, while simultaneously deterring, delaying or denying
PEACEFUL RESOLUTION: A statement issued following a meeting between Australia and Britain reiterated support for Taiwan and opposition to change in the Taiwan Strait Canada should support the peaceful resolution of Taiwan’s destiny according to the will of Taiwanese, Canadian lawmakers said in a resolution marking the second anniversary of that nation’s Indo-Pacific strategy on Monday. The Canadian House of Commons committee on Canada-Chinese relations made the comment as part of 34 recommendations for the new edition of the strategy, adding that Ottawa should back Taiwan’s meaningful participation in international organizations. Canada’s Indo-Pacific Strategy, first published in October 2022, emphasized that the region’s security, trade, human rights, democracy and environmental protection would play a crucial role in shaping Canada’s future. The strategy called for Canada to deepen
TECH CONFERENCE: Input from industry and academic experts can contribute to future policymaking across government agencies, President William Lai said Multifunctional service robots could be the next new area in which Taiwan could play a significant role, given its strengths in chip manufacturing and software design, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman and chief executive C.C. Wei (魏哲家) said yesterday. “In the past two months, our customers shared a lot of their future plans with me. Artificial intelligence [AI] and AI applications were the most talked about subjects in our conversation,” Wei said in a speech at the National Science and Technology Conference in Taipei. TSMC, the world’s biggest contract chipmaker, counts Nvidia Corp, Advanced Micro Devices Inc, Apple Inc and
QUICK LOOK: The amendments include stricter recall requirements and Constitutional Court procedures, as well as a big increase in local governments’ budgets Portions of controversial amendments to tighten requirements for recalling officials and Constitutional Court procedures were passed by opposition lawmakers yesterday following clashes between lawmakers in the morning, as Democratic Progressive Party (DPP) members tried to block Chinese Nationalist Party (KMT) legislators from entering the chamber. Parts of the Public Officials Election and Recall Act (公職人員選舉罷免法) and Constitutional Court Procedure Act (憲法訴訟法) passed the third reading yesterday. The legislature was still voting on various amendments to the Act Governing the Allocation of Government Revenues and Expenditures (財政收支劃分法) as of press time last night, after the session was extended to midnight. Amendments to Article 4
RSS