TAIPEI: The economic affairs authorities will try to figure out a better way to help Taiwan's ailing DRAM sector and do its best to communicate with the Legislative Yuan after lawmakers recently rejected the government's plan to restructure the industry, the official heading the department said yesterday.

Economics chief Shih Yen-shiang, who just returned from Singapore after attending the Asia Pacific Economic Cooperation (APEC) forum, stressed that he understands legislators' concerns about the government-backed Taiwan Innovation Memory Co (TIMC).

The economic affairs authorities need to make more of an effort to restructure the DRAM industry, with TIMC being one of the possibilities, Shih said. The economic affairs authorities will explain to lawmakers the necessity of establishing TIMC and review other ways of pushing the project, he added.

The Legislative Yuan's Economics Committee adopted a resolution last Wednesday to ask the economics authorities to suspend the restructuring plan and withdraw proposed financial support for TIMC, which was supposed to be its centerpiece.

The government hoped that TIMC would secure badly needed core technologies and bring together some of the sectors big players, including Powerchip Semiconductor, ProMOS Technologies, and Rexchip Electronics.

The company, which has yet to begin operations, received a commitment from Japan-based Elpida Memory to contribute technology, and had requested NT$4.9 billion from the government to get the venture started.

While the Executive Yuan approved the request in principle, the investment project needs the approval of the Legislative Yuan before it can be implemented.

Although the global DRAM market is picking up, Shih said, the DRAM industry's fundamental problems have not yet been solved.

One of the issues the restructuring plan intended to address that still exists was the over-reliance of local chipmakers on foreign technology and the NT$20 billion to NT$30 billion they have to pay per year in technology licensing fees, Shih added.

Though the local DRAM industry has been resistant to consolidation, some analysts hoped that the recently announced merger of two of Taiwan's leading liquid crystal display (LCD) panel manufacturers - Innolux Display Corp and Chi Mei Optoelectronics (CMO) - might nudge the DRAM sector in that direction.

China Daily/CNA

(HK Edition 11/18/2009 page2)