TAIPEI (Reuters) - Shares of Taiwan's DRAM makers rallied on Wednesday, after the government said it would support the struggling local industry by helping it to develop more local technology and boosting its global competitiveness.
Powerchip 5346.TWO, the island's largest memory chip maker, and smaller rival Nanya Technology (2408.TW) gained 4.41 percent and 5.38 percent, respectively, as of 0250 GMT on Wednesday, outperforming a 2 percent jump of the benchmark TAIEX .TWII.
Shares of the island's third-largest DRAM maker ProMOS 5387.TWO surged by their daily 7 percent limit after local media reported on Tuesday that U.S. Micron Technology MU.N President Mark Durcan was set to talk with Taiwan government officials about a possible tie-up with ProMOS.
Taiwan government officials confirmed they exchanged views with Micron executives late on Tuesday, but did not provide further details. [nTP199281]
The U.S.-Taiwan Business Council welcomed the government's moves to bring the struggling industry back to health.
"While the council does not favour nationalisation of Taiwan chip companies, such assistance is imperative to inject needed liquidity and to safeguard the future of this vital sector during the global recession," the U.S-based council said in a note.
Citigroup also approved of the government's move but saw no significant rebound for local dynamic random access memory (DRAM) chipmakers' shares and encouraged further consolidation among the sector. "Absent a sharp price rebound, Taiwan players may need to become subsidiaries of Japan/U.S. firms to keep pace with Samsung's technology migration," Citigroup analyst Timothy Lam wrote in a research note to clients on Wednesday.
Reporting by Gina Chang, Editing by Jacqueline Wong