TAIPEI Nov 10 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
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.
(Reporting by Baker Li and Argin Chang, Editing by Jacqueline