UMC calls for Taiwanese DRAM alliance

Amid falling prices and growing concerns of a DRAM crisis in Taiwan, United Microelectronics Corp has called for the integration of the island’s memory industry.

Vice chairman John Hsuan made suggestions that the Taiwan memory market would benefit from integration with the leadership of one of its experienced enterprises.

Late last week it was announced that one of the nation’s leading DRAM manufacturers, ProMOS, would be cutting its capital by 85 percent and calling in financial advisors to steer clear of disaster.

The industry in Taiwan has felt the effects of nose diving prices, with bottom lines hit, sparking fears of a crisis in the industry.

A Ministry of Economic Affairs minister stepped in to calm fears around a potential collapse of ProMOS and its knock-on effect for the rest of the industry.

The MOEA claimed that as the memory firm only accounted for roughly 10 percent of the nation’s production there should not be too much concern.

It said it will give ProMOS “necessary assistance” if called for, with the government happy with the approach taken so far.

However, the DRAM problem on the island lingers on, and Hsuan believes that it would be necessary to unite the industry, writes CENS.

Hsuan noted that a previous failed attempt to integrate manufacturers should not serve to deter another attempt.

Back in 2009, Hsuan was tasked with leading a project to integrate the island’s DRAM industry while it was experiencing substantial losses.

He believes the same should be done but with the leadership of local firms with experience in manufacturing, where he lacks expertise.

Hsuan could be pointing to Nanya Technology Corp and Inotera  Memories Inc, both part of the Formosa Plastics Group.

The group warns that kind of integration would be a tall order, with an estimated financial cost of $3.4 billion.

The integration would also mean going against the advice of economics minister Y.S. Shih, who recently gave some indication that Chinese investors will be welcomed into the DRAM industry.

This is a change of stance from the minister, following the revision of investment rules in March, allowing Chinese firms to invest up to 10 percent in Taiwanese companies.

However, Hsuan’s suggestions have been voiced elsewhere too, with Kingston’s David Sun demanding measures to fend off foreign invasions.