Taiwanese Memory Maker's May Receive Help

The Financial Times (FT) reports Taiwanese DRAM manufacturers:

Taiwan's government is moving closer to devising a bail-out package for the country's struggling memory chipmakers, many of which face impending loan repayments amid mounting losses.

Shih Yeh-Shiang, viceminister of economic affairs, said yesterday Taipei had earmarked T$200bn (US$6bn) in financial aid for ailing large companies, which includes producers of dynamic random access memory (D-Ram) who are the hardest hit globally among semiconductor makers.

Half of the T$200bn earmarked by the government had been approved by the legislature, Mr Shih told reporters yesterday, while the other half was under review. He said that: "All options are on the table" as to how the government will use that money and what it would demand from chip companies in exchange.

Although the government previously nixed a wide-scale DRAM bailout, it seems the situation has become increasingly dire and that these companies are starting to receive some support. The FT article outlines some of the strategies employed by these companies including extending their loan terms with the banks. Unfortunately for these companies, they will have to wait until the end of the Chinese New Year for more solid government resolutions to be made.

Some bittersweet news for Taiwanese DRAM makers is that Samsung Electronics intends to cut their CAPEX significantly. According to Digitimes:

A recently-reported slash in capex for 2009 by Samsung Electronics has raised concerns among market watchers that a deceleration in the growth of the global memory market may become even more severe than expected this year. However, the memory chip maker's capex cuts will reduce the pressure on its competitors, which are struggling from overcapacity and falling chip prices.

With an easing in competitive pressure the market may recover but will the demand be there? The DRAM industry has been struggling for a long time now. Something has to change.

Financial Times: Taiwan closer to bailing out its chipmakers
Digitimes: Samsung reported 50% capex cut dampens memory outlook, but lifts pressure on competition