TOKYO Nobody is saying that the ongoing merger and consolidation talks between Japan's Elpida Memory Inc. and its Taiwanese competitors are deadlocked, but they're evidently growing more complicated.
At stake are not just the survivals of these battered memory manufacturers, but also the two countries' national pride.
Dow Jones reported Thursday (Feb. 5) that the Taiwan government is considering buying a stake in Japan's Elpida Memory Inc. as part of a plan to bolster Taiwan's memory chip sector.
The news agency's report quoted Chen Chao-Yih, director-general of Taiwan's Industrial Development Bureau, saying that "the government isn't ruling out the possibility [of buying shares in Elpida]...The plan requires agreement from both sides."
The Taiwan government reportedly aims to present a plan for the consolidation of Taiwan's DRAM industry in one month.
Meanwhile, an official at Japan's Ministry of Economy, Trade and Industry said, "If Elpida goes into a bankruptcy, that could harm Japan's entire electronics industry."
In a bid to shore up its capital, Elpida is
exploring the Japanese government's bailout program.
The general sentiment among the business community here is that Japan's Ministry of Economy, Trade and Industry should expedite its creation of screening criteria for companies that will be eligible for an infusion of public funds. The fact that Elpida is the last DRAM manufacturer standing in Japan makes Elpida's application a likely shoo-in.
However, it isn't a done deal.
A bill approved by Japan's Cabinet Tuesday for troubled non-financial institutions to receive public funding still needs to be passed into law by the Japanese Diet.
Further, an unnamed executive at the Development Bank of Japan was quoted Thursday in the Asahi newspaper as being "irked" by leaked news reports full of speculation about the proposed program.
Under the proposed government bailout plan, Elpida, the first to emerge so far as a potential candidate, could receive funds in exchange for issuing preferred stock to the Development Bank of Japan (DBJ). In return, the DBJ is seeking the power to choose independently who is eligible for the funds.
Separately, a new debate is also brewing in Japan about the wisdom of using public funds to save failed enterprises.