The latest news: the government is working on a $6 billion bailout for computer chip makers. Blurb (my emphasis):
Taiwan’s government is moving closer to devising a bailout package for the country’s struggling memory chip makers, many of which face impending loan repayments amid mounting losses.
Shih Yeh-Shiang, vice minister of economic affairs, said on Monday the government had earmarked T$200bn ($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 $6bn earmarked by the government has been approved by the legislature, Mr Shih told reporters, while the other half is still under review. “All options are on the table” for how the government will use that money and what it would demand from chip companies in exchange.
Prices for D-Ram, the type of memory chip mostly used in computers, fell drastically last year as a result of chronic oversupply and falling demand due to the financial crisis.
In response Taiwan memory chip makers have slashed production but they continue to struggle because their products are still selling for below cost on the spot market.
Analysts estimate that Taiwan’s three big D-Ram companies – Powerchip, ProMos and Nanya Technology – would have to pay back about $500m in bank loans in the first quarter of this year, with a similar amount due in the second quarter. This means that a bailout would be needed soon unless banks could be persuaded to delay loan repayments.
Apparently, Bailout Fever is not only an American disease.
Also, FYI: Taiwan ranks in the top 3 chip makers in the world, along with the US and Japan.
RELATED POST:
The Italian government's bailout of the Parmesan cheese industry.
I repeat a sentiment that was bandied about last night over dinner with La Parisienne, Il Barista, and the Cine-Sib: "WHERE'S MY BAILOUT?"
No comments:
Post a Comment