Taiwan looking to inject $864 million in new DRAM company Taiwan Memory

Taiwan will inject up to T$30 billion ($864 million) into Taiwan Memory Inc, the new DRAM company it is setting up to bring long-term viability to its struggling memory chip sector, the company's new chief said on Tuesday.

"The less money the government invests, the better," said John Hsuan, who was named last week to head the new company. "The government hopes we can accomplish this goal with T$30 billion.'' Economics minister Yiin Chii-ming had previously said the government had up to T$70 billion from its national development fund to invest in the new company.

Hsuan also said some private equity funds have contacted him about possible investment in Taiwan Memory, and he was also seeking funds from foreign investment banks. He did not provide any names.  He also announced plans to visit executives at Japan's Elpida Memory Inc. and Micron Technology Inc. of the US in two weeks to discuss obtaining access to their chip technologies and patents.

Taiwan last week announced the formation of Taiwan Memory Inc, and said the government would hold less than half of the new company. It will try to get the island's top DRAM makers, including Powerchip and Nanya Technology to join the new company. The Taiwan government expects the move to provide a viable competitor for Korean powerhouses Samsung and Hynix.

''We can't lose all the money from the government and the private sector and there are definitely risks,'' said Hsuan, who is also honorary vice chairman of United Microelectronics Corp, the world's No. 2 contract chipmaker. He reiterated that the new company has no plans to set up its own chip plants in the short term and local DRAM makers should try to seek ways to survive the current downturn now.

Commenting on the industry outlook, Hsuan said there is still no sign of an industry recovery. "I don't think there will be a strong recovery even after the global financial crisis is over," Hsuan said. He doesn't expect the increasing popularity of netbooks - low-cost laptop computers - and a new version of the Windows operating system, Windows 7, to spur a significant increase in demand for DRAM chips.