SAN JOSE, Calif. -- The Taiwan government is bailing out the island's loss-ridden DRAM sector.
As part of the proposed plan, Taiwan will consolidate all of its DRAM makers and form a new company, dubbed Taiwan Memory Co., according to Dow Jones.
The Taiwan government will own less than 50 percent of Taiwan Memory, the report said. The entity will form a partnership with either Elpida Memory Inc. or Micron Technology Inc., according to the report.
John Hsuan, a former vice chairman at United Microelectronics Corp. (UMC), will led the new company.
Taiwan Memory is still in the planning stages. Many wonder if the plan will work amid a major memory downturn. Some are doubtful. Even if Taiwan forms a new DRAM company, the chances of survival are slim.
The DRAM market is horrible. There are too many players in a poor market. In DRAMs, Taiwan is simply too small to compete against Korea, namely Samsung Electronics Co. Ltd. Even Samsung is struggling in a bad market.
Plus, it's unclear if Micron or Elpida will agree on the plan. Both have their own interests on the island and the stakes are high.
Micron is aligned with Taiwan DRAM maker Nanya Technology Corp. The two companies have a joint DRAM venture in Taiwan.
Elpida is aligned with Taiwan's Powerchip Semiconductor Corp. The two companies have a joint DRAM venture in Taiwan.
Meanwhile, Hynix Semiconductor Inc. is aligned with ProMOS. Hynix owns a stake in ProMOS, a DRAM maker.
And Qimonda AG is aligned with Winbond Electronics Corp., a Taiwan DRAM foundry.
For some time, Nanya, Powerchip, ProMOS and Winbond have lost huge sums of money, leaving some to wonder why Taiwan is in the DRAM business in the first place. Many think Taiwan should throw in the towel and look for new markets.