DRAM leader Kau to decide on alliance
Enterprises must work to plug brain drain, says FSC
Former president of Nanya Technology Corp. ( ) Charles Kau ( ) will likely make his decision on whether to join China’s Tsinghua Unigroup this week, according to local media sources yesterday, which will ultimately decide the future of the domestic DRAM industry.
Kau’s rumored decision to jump ship to Tsinghua Unigroup — likely to be made as early as this week — is seen as an opportunity to “unite Taiwan, mainland China and the U.S., to form a united DRAM front against South Korea,” according to insider sources cited by the United Evening News, a different outlook compared to the initial pessimistic reaction from the DRAM industry.
The potential DRAM industry alliance between the three countries would not only prove advantageous for the U.S.-based Micron Technology, Inc., which is an expert in the industry, but would also benefit China, which would be able to develop in the industry as well. Taiwan could seize the chance to expand its footing in the mainland market, sources said.
Nanya Technology, an affiliate of Formosa Plastics Group, stated Monday that both Nanya and Tsinghua Unigroup are banking on possible cooperation. Sources also speculate that a China-U.S. DRAM memory industry pact will happen as well, which could lead to a wave of factories being set up in China. The government and the industry fear the change could weaken Inotera Memories Inc.’s ( ) subcontractor role and mean that the impact of the socalled red supply chain would begin to be felt.
Avoiding Brain Drain
with Less Tax
Domestic enterprises must find a way to provide incentives to keep local talent, Financial Supervisory Commission (FSC) Chairman Tseng Ming-chung ( ) has said, faced with the possibility of Kau’s move to Tsinghua Unigroup. Finance Minister Chang Sheng-ford ( ), on the other hand, emphasized the importance of cultivating future talent and passing laws that will encourage bonuses for key personnel and lower their tax burdens.
Tseng provided an example: The FSC is aiming to fix the payout ratio for employees investing in shares and has announced the changes in hopes of it becoming an incentive to keep workers on. Chang said that the initial impact of Kau switching jobs would highlight Taiwan’s continual brain drain. The government must proactively foster talented workers, the chairman said.
The Ministry of Economic Affairs (MOEA, ) has drawn up regulations for innovative industries that aim to strengthen cooperation between enterprises to make it easier for them to hold onto their best employees. The regulations include providing restricted stocks and other taxation measures that are aimed at lowering the tax burden, stated Tseng.
“Enterprises have also clarified that the development of an industry cannot be decided by one person alone; Kau jumping ship would cause a ripple effect,” Tseng said, “but not one as severe as many have warned of.”