Nov 12, 2001

When supply exceeds demand in the IT arena, every manufacturer suffers, but especially those in the chip making business. Attracted by the relative strength of Taiwan IC makers, European fellow sufferers seem to be attracted by this phenomenon like moscitos by candlelight and seek cooperative ties. Here is a breakdown of this weeks news, supplied by reliable source and rumor mongers.

The Taiwan semiconductor industry's remarkable performance has impressed European countries like Belgium, the UK an Swedeb which will apparently send representatives to Taiwan in November and December this year and March next year, respectively, to seek cooperation opportunities. European countries boast strong abilities in producing precision machinery and communication systems, and seeing that Taiwan has a complete semiconductor semiconductor industry chain and outstanding manufacturing capability, some intend to further enhance their technologies by combining with the advantages of Taiwan IC firms.

In 2000, UK companies sent representatives to visit Taiwan, after which the Taiwan Semiconductor Industry Association also invited Taiwan companies to go to the UK.

The December and March visits to Taiwan IC companies by the UK and Sweden will be the first time these European nations send representativess in the names of the government, newspapers in Taiwan haste to point out. It will also be the first time for foreign government institutions to take initiatives to apply for visits to Taiwan and introduce the latest technologies.

Belgium-based IMEC is scheduled to send a delegation to Taiwan still this month. Led by IMEC president and CEO Gilbert Declerk, the delegation will introduce the latest semiconductor research and development technologies achieved by IMEC. IMEC is a leading independent research center for the development and licensing of microelectronics, information and communication technologies. It has around 1,100 R&D staff and operates on an annual budget of 120 million Euros. IMEC has been carrying out R&D projects with 518 microelectronics companies and R&D and academic institutions all over the world and had formed strategic alliances with Sematech and Philips in the USA.

In December, Invest-UK, England's national foreign direct investment agency, will lead a group of people from the country's research and academic organizations and government research research institutions to visit Taiwan's semiconductor firms an at the same time announce their latest technological achievements.

The Swedish Trade Council is slated to visit Taiwan in March next year and pay visits to Taiwan IC companies.

Taiwan makers bashful on Infineon

Last week, Agence France Press (AFP) reported from Frankfurt that Infineon, Europe's number two semiconductor maker, was apparently in talks with three Taiwan computer chip makers about a joint memory chips venture, quoting Infenion chairman Ulrich Schumacher in an newspaper interview. The agency reported that Infenion was discussing an possible merger of its D-RAM activities with those of Mosel Vitelec, Winbond and Nanya of Taiwan, as Schumacher told the Financial Times Deutschland edition.

The four companies together would have a combined global market share of 20%, he told the paper which reported the chairman's comments only indirectly. Schumacher called the possible merger !X which would create the world's biggest D-RAM chipset producer !X a "strategic consideration" in Infenions efforts to accelerate restructuring in the embattled chip industry.

However, at the same time, Taiwan's economic news agency CENS reported that several Taiwan DRAM manufacturers refrained to comment on these media repoprts that they were in talks with Infineon Technologies AG for combining their operations.
In detail, the chairman of Mosel Vitelic confirmed that the German chip giant indeed had already offered a merger proposal. but declined to elaborate. Mosel Vitelic, in fact, has set up a DRAM joint venture with Infineon in the form of ProMOS Technologies, of which the German chipmaker holds a 32.6% stake, the agency said.
Officials of ProMOS were quoted as saying that they will look into a "closer" cooperation with Infineon.

An official at Winbond declined to comment, while Nanya Technologies said such a merger was "impossible".

All these merger and cooperation reports come at a time where Taiwan DRAM makers are laboring under its worse-ever slump, with all of them posting losses in the first three quarters of the year.