Taiwan govt asks Powerchip to resubmit rescue plan

TAIPEI, Dec 30 (Reuters) - Taiwan's economics ministry said on Tuesday it asked DRAM (dynamic random access memory) chip maker Powerchip (5346.TWO) to resubmit plans for a company turnaround as the government tries to engineer a rescue for the struggling sector.

Powerchip, along with other major DRAM makers in Taiwan, have recently submitted plans for turning around their operations, which have posted massive losses in recent quarters amid the sector's worst ever downturn.

But the economics ministry said it asked Powerchip, Taiwan's largest DRAM maker, and its Rexchip joint venture, to resubmit a plan following its original proposal late last week. That plan also involved Japan's Elpida (6665.T), a technology supplier to Powerchip and the joint venture partner in Rexchip.

"The economics ministry has asked Powerchip and Rexchip to submit an amended plan that conforms with (the ministry's) expectation," the ministry wrote in a statement, without providing more specifics.

It added that companies receiving T$1 billion ($30 million) or more in funds as part of the rescue program will have to report their plans to the legislature.

Last Friday, Powerchip said it had submitted its proposal detailing plans to work with Elpida on their Rexchip joint venture, but did not give further details.

Taiwan's No. 3 DRAM maker, ProMOS (5387.TWO), has also asked for government assistance in its own proposal.

Market talk about consolidation has swirled through the global DRAM industry in recent months, as many say streamlining is critical to address the sector's large oversupply of DRAM chips used mainly in personal computers.

(Reporting by Doug Young; Editing by Rupert Winchester)