The company also has submitted an application for government funding to the tune of NT$4.5 billion (US $140 million) to set up a new NAND flash company.

In a statement, Frank Huang, chairman of Powerchip Semiconductor Corporation, said the company has detailed, in its application, what the government is seeking in its attempts to restructure the memory industry in Taiwan.

PSC has already obtained a technology licence from Renesas Technology, the semiconductor maker based in Japan, and has developed its in-house flash memory technology as well as built its “pool of talents,” Frank Huang added.

Huang said he believes that Taiwan needs to look further than the sick DRAM industry and jack up efforts to develop NAND flash to achieve sustainable growth.

PSC is planning to establish a new memory company called Taiwan Flash Company (TFC), with funding from both the government of Taiwan and other companies in the private sector.

For the initial investment in Taiwan Flash Company, Powerchip Semiconductor Corporation has sought NT$4.5 billion from the government of Taiwan and an additional NT$5.5 billion from private investors.

To start with, TFC will target R&D of flash memory chips, with the manufacturing support of PSC fabs. Initially, TFC plans to produce 40,000 wafers a month, and then gradually increase the output to 80,000-120,000 wafers a month, according to Frank Huang. It is estimated that TFC project will cost a total of NT$20 billion.