Rumors have circulated that Powerchip Technology chairman Frank Huang recently met with Premier Wu Den-yih to explore the possibility of resuming the government-led initiative to consolidate Taiwan's DRAM industry. In response, both Powerchip and the Ministry of Economic Affairs (MOEA) said they have no knowledge of the talks.
The Taiwan government previously put forward a plan to revive the island's DRAM industry after it was hit by the global economic crisis, but the project came to a halt as industry players failed to arrive at consensus, while a recovery in chip prices and demand meant the rescue was no longer needed.
Hwang Jung-Chiou, vice minister of the MOEA, has revealed that the window of opportunity to capitalize on a restructuring of Taiwan's DRAM industry has passed. Disagreements among the companies involved are one cause, and legislative defeat is the other, Hwang indicated.
Taiwan's MOEA was barred by lawmakers from obtaining a budget from the National Development Fund (NDF) to support Taiwan Innovative Memory Company (TIMC). Originally founded as part of a government plan to develop Taiwan's home-grown DRAM memory technology, TIMC called off the mission following legislative hurdles in early 2010. Meanwhile, demand and chip prices started rebounding around the same time making the government-led rescue plan more unlikely.
In other news, speculation surfaced recently that the Formosa Plastics Group (FPG), parent company of Nanya Technology and Inotera Memories, is mulling giving up its stakes in the two DRAM companies as recent fire accidents at FPG's petrochemical complex have discouraged from paying attention to non-core investments.
Powerchip, Nanya and Inotera all reported net losses for the second quarter of 2011, due to continued falls in DRAM prices as a result of weak PC sales. Powerchip disclosed it would allocate more capacity to produce non-DRAM products on an OEM basis, while Nanya and Inotera both reiterated shipments of non-PC DRAM products are expected to grow substantially by the end of 2011.