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.”

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