Taiwan Memory Company (TMC), the government sponsored memory company designed to take over debt-ridden DRAM makers, was officially incorporated in Taiwan, a government representative said Tuesday.
The DRAM (dynamic RAM) maker will be led by its new chairman, John Hsuan, the representative said. Hsuan is a chip industry veteran in Taiwan and honorary vice chairman at contract chip maker United Microelectronics.
His first act was to turn in an investment application to the Ministry of Economic Affairs in Taiwan, the department charged with doling out money to save the DRAM industry. The representative was unable to provide details of the application. Taiwan has pledged to invest NT$30 billion (US$915 million) in one or more DRAM makers so long as their applications include building Taiwanese research and development prowess and promoting DRAM industry health through mergers and acquisitions.
TMC opened with paid-in-capital of NT$500,000, according to the economics ministry's Web site. Hsuan holds 49,000 shares of TMC, while a member of the board of directors holds the remaining 1,000 shares.
The company has already agreed to work with Elpida Memory on DRAM technology development and has pledged to invest
Taiwan's five big DRAM makers ran into financial trouble amid the global recession and after suffering two years of losses caused by a massive chip glut. Over investment in new production facilities led to the chip glut, which sent DRAM prices spiraling downward in late 2007. Prices have yet to recover to a profitable level for most DRAM companies.
TMC was established to restructure Taiwan's DRAM industry and save local banks. DRAM makers on the island owe more than NT$430 billion in debt, mainly to Taiwanese banks. The government also wants TMC to end the Taiwanese practice of depending on foreign DRAM technology and instead beef up the technology prowess of Taiwanese memory chip makers.
Elpida has faced financial difficulties similar to its Taiwanese rivals. The Japanese chip maker posted its seventh straight quarterly net loss on Tuesday. Elpida's net loss widened to
The last net profit Elpida reported was
The company recently shored up its finances with
Although Elpida's results were down compared to last year, they showed improvement over the first quarter of this year, when revenue in the global DRAM industry hit an eight-year low, according to market researcher Gartner.
In a statement, Elpida said some global economic stimulus plans have helped the world economy recover, leading to better times for DRAM makers. "In the DRAM market, demand and supply conditions tightened, as PC and memory module makers along with digital consumer electronics makers increased their DRAM procurement in anticipation of future demand trends," the company said.
The company started a business restructuring plan in July that will run through March 2012. Elpida aims to boost its finances and R&D as well as strengthen its relationship with Taiwanese DRAM makers and shift production of commodity DRAM to Taiwan, the company said.