Taiwan Today

Fubon Life Insurance Co. Ltd., a subsidiary of Fubon Financial Holding Co. Ltd., will acquire 80 million shares in Taiwan Innovation Memory Co. for a total cost of NT$800 million (US$24.77 million), according to an Oct. 16 filing with the Taiwan Stock Exchange Corp. TIMC, a start-up company with strong backing by the government and formerly named Taiwan Memory Co., is thought to be crucial to the nation’s future in the dynamic random access memory sector. In declaring its plans to acquire a stake in TIMC, Fubon becomes the first financial institution on the island to answer the government’s call for businesses to invest in the state-supported DRAM maker. Fubon Financial President Victor Kung said that the group’s decision is based on a bullish outlook for the memory maker. The group regards its investment in the company as similar in nature to investing in a venture capital project, he added. TIMC has submitted its registration application with the Ministry of Economic Affairs with an initial capital of NT$500,000, and plans to raise a total of NT$11 billion for the first stage of its operations. Based on these figures, Fubon Life will acquire a 7.27-percent stake in the DRAM firm. Other than Fubon Life, several local financial institutions have also expressed a strong interest in TIMC, especially now that signs of recovery of the DRAM sector are in sight. To show their support for the government-sponsored project, Mega Financial Holding Co. and China Development Financial Holding Corp., two of Taiwan’s major industrial banks, have both confirmed they are evaluating the possibility of providing equity capital to the DRAM firm. It is expected that both firms will reach a final decision by early November. According to sources familiar with the issue, boards of Silicon Precision Industries Co. Ltd. and King Yuan Electronics Co. Ltd. have also given their consent to investing in TIMC. Taiwan’s Elite Semiconductor Memory Technology Inc. and Compal Electronics Inc., as well as the U.S.-based Kingston Technology Co. have also been named as possible investors in the chipmaker. The board of IC design house MediaTek Inc., however, has reportedly decided to put its investment plans in TIMC on hold. In addition to the private sector, it is understood that the Cabinet-controlled National Development Fund will also inject a maximum amount of NT$5 billion into the new company. (SFC-HZW) (The article originally appeared in the "Commercial Times" Oct. 17, 2009)