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Powerchip, Taiwan Memory seek gov't funds

Posted: 28 Oct 2009 ?? ?Print Version ?Bookmark and Share

Keywords:DRAM? Taiwan memory market? Taiwan fund?

Taiwan DRAM makers Powerchip Semiconductor Corp. and Taiwan Memory Corp. (TMC) are separately seeking state support in an effort to survive, according to Gartner Inc.

TMC's prospects appear to be dim, warned the research firm. TMC, now called Taiwan Innovation Memory Co. (TIMC), is a proposed DRAM venture.

Hit hard by the downturn, Taiwan DRAM vendors had until Oct. 20 to submit their proposals requesting state funds from the island's government.

Loss-ridden Powerchip asked for state aid. It also set up a new corporation, dubbed Taiwan Flash Corp. (TFC) with total capitalization of $606 million, according to Brady Wang, an analyst with Gartner.

TIMC submitted a separate proposal. Another Taiwan DRAM vendor, ProMOS Technologies, "didn't submit a proposal for financial support, but it will partner with TIMC on production and R&D," Wang said.

Originally, three Taiwan DRAM makersPowerchip, ProMOS and Rexchipwere supposed to combine their operations into a new venture called TIMC. TIMC's technology partner is supposed to be Elpida Memory Inc. of Japan.

"Since the original proposal, surging DRAM prices have moved to a point at which they cover production costs for most DRAM vendors, making it more difficult for TIMC to consolidate small DRAM vendors into the new venture and to negotiate with technology suppliers," Wang said.

"While this has limited TIMC's prospects, potential participants have won only a reprieve from their ultimate fate; prices may cover production costs for most DRAM vendors for now, but small and midsize companies will not be able to survive in the long term," Wang said.

"As the larger producers move into new-generation technology and reduce their own costs, they will again place the small players at a distinct disadvantage," Wang said. "Many will have to consider the prospect of being bought out, although this may come too late for TIMC to benefit."

As expected, another Taiwan DRAM makerNanya Technology/Inotera Memoriesdecided "not to ask for any subsidies, preferring instead to continue their joint technology development with Micron Technology for sub-50nm DRAM technology, even down to 4x nm," according to the firm," Wang added.

- Mark LaPedus
EE Times

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