Dec. 15, 2008 – ProMOS is poised to officially file for assistance from the Taiwanese government, a move that comes with a catch — the company would have to abandon its partnership with Korean chipmaker Hynix and forge ties with Japan’s Elpida, notes the Taiwan Economic News.

With DRAM spot prices sinking even further below manufacturing costs ($0.60 for DDR2 1GB eTT, per DRAMeXchange), Promos is searching for ways to stem the flood of red ink, including disposal of “some 100” 300mm test tools, and is selling stakes in reinvested companies for cash, the paper notes. The company apparently is facing NT$16.6B (US $500M) in bills as of 3Q08, plus debt totaling NT$11.1B ($335M) in convertible bonds and NT$1.3B ($39M) in long-term loans due in early 2009. Faced with a NT$10B ($>300M) cash deficit, the company needs to dispose of assets and seek outside help.

Other “industry insiders,” though, warn that the problems in the DRAM industry won’t be solved by government aid — and its requirement to work with Elpida — since the problem is now one of demand, and the need to hike interest in domestic technology vs. “costly technical exchanges.”