Taiwan's Ministry of Economic Affairs (MOEA) has reportedly drafted about NT$200 billion (US$6.50 billion) to be used in a bailout of the island's fragile DRAM industry.

Though the news has yet to confirmed, some legislators have already started criticized the government's rescue package.

Chii-Ming Yiin, Taiwan's minister of economic affairs, did not deny the speculated bailout amount. According to Yiin, any bailout measures for local DRAM makers are subject to risks, costs and benefits on their impact on economic growth and they will be carefully evaluated. Yiin believed that the bailout applicants were not just looking for cash injections, but mainly requested that the government negotiate with local banks and help sort out their debt problems and schedules.

Some legislators commented that the NT$200 billion bailout draft should be examined carefully before being implemented. Those commenting appeared to be opposed to the DRAM rescue plan, as they expect companies to commit themselves to changing economic conditions. In addition, legislators voiced concerns that the government's intervention in failing enterprises goes against the market mechanism.

Alternatively, if the rescue turns out to fail, the taxpayer-financed rescue package funds will be flushed down the drain, according to the legislators. Even if the bailout package is carried out successfully, more state-run companies or financial institutions will want the government to act accordingly if their businesses face difficulties, which would mean an end to a free market, indicated the legislators.

By: DocMemory
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