Taiwan loosens payment conditions to help DRAM makers
TAIPEI Nov 10 (Reuters) - Taiwan announced measures to loosen loan and payment conditions on Monday to help the island's loss-making DRAM memory chip makers weather the industry's worst downturn in its history. The Ministry of Economic Affairs will allow companies whose operations are normal to extend the deadline on bank loan payments due in March next year by six months, the ministry said in a statement.
Companies can also seek a grace period of up to six months for check payments as long as they apply to the ministry for the request 10 days before their check payments are due, it said.
"(DRAM companies') total loans from banks are T$420 billion ($12.8 billion), but I can't talk about details because listed companies are involved," Shih Yen-shiang, a deputy economics minister, told a parliamentary committee meeting.
Three major DRAM makers in Taiwan -- Powerchip 5346.TWO, Nanya Technology (2408.TW) and ProMOS 5387.TWO -- are struggling with falling chip prices caused by oversupply. They have been in the red in the past several quarters.
Analysts say the companies, which make dynamic random access memory (DRAM) chips mainly for personal computers, are also facing liquidity problems and some of them are seeking ways to raise funds to repay bank loans and bonds.
On Monday, Powerchip Semiconductor shares rose 6.7 percent to their daily limit, against the main TAIEX's .TWII 0.04 percent fall. Nanya Technology shares jumped 5.6 percent and ProMOS Technologies shares gained 4.1 percent.
Besides the short-term measures, Chen Tain-jy, chairman of Taiwan's Council of Economic Planning and Development, said at the same meeting that the state planner would also be looking at the industry's development in the longer term.
When asked by lawmakers if the National Development Fund would invest in DRAM firms, Chen said: "We will insist that our targets should be competitive in the future and we will only invest in companies that will have a key market share in the world."
Chen declined to identify any potential firms.
Late last month, Taiwan raised the size of its National Development Fund, convened by Chen, five-fold to T$1 trillion as it looked for new resources to help firms facing potential problems due to the global credit squeeze. (US$1=T$32.8) (Reporting by Baker Li and Argin Chang, Editing by Jacqueline Wong)
- Police seek motive in fatal Washington state school shooting
- Wall St. finally turning on Amazon as Bezos magic fades
- Two deputies killed, two others hurt in California shooting spree
- Iran hangs woman convicted of killing alleged rapist
- Medical worker quarantined in New Jersey under new Ebola safeguards |