Governments Preparing To Bail Out DRAM Makers

An anonymous reader writes "DRAM makers are facing one of the worst downturns in their history and governments around the world are lining up to help companies through the mess. Taiwan, Germany and South Korea all appear poised to offer some assistance to their DRAM chip makers. The chip makers' problems are indicative of global woes. Easy lending terms and a bright view of the future prompted them to build too many new DRAM factories. Much of the new output was aimed at Microsoft's Windows Vista, which has higher memory requirements than XP."

Comments

Bailout Bandwagon

[slifox]

Do government bail outs happen all the time, and its only recently that the term "bail out" has become popular? Or are all industries everywhere simultaneously going broke just now?

I don't follow the financial world much, so all of a sudden I see * industry bailouts over and over again... From an outsider's perspective, it kinda seems like a bandwagon

Where do I sign up to get bailed out of my personal company's (i.e. me) financial problems by the government?

Anyways, isn't bankruptcy supposed to be the "bail out," but with accountability instead of just writing large checks and calling it a successful bail out?

If anyone gets any government money, they ought to be held accountable for its use and for making sure that this situation never happens again.

I wish politicians, CEOs, and just the general public would start looking at the long term costs and benefits rather than focusing on immediate reward. Think of all the current worldwide problems we wouldn't have to worry about! Then again, thats much easier said than done...

Re:Bailout Bandwagon

[Dr. Hellno]

I'd gotten the same impression, but it seems that the term has been in use for a while. Here's one example from 1979

I hardly expect anyone to read that, so I'll summarize. In 1979, according to this article, the Carter administration offered 1.5 billion dollars to Chrysler in what was referred to as a bailout (also called, somewhat quaintly, a "tide-me-over"). Amazingly, the company was proposing a shift to fuel-efficient cars that would get them back to profitability "by 1981". This is all before my time, but I do know that if they ever followed that business model it can't have lasted very long. And so we find them today, stuck in the same ditch they'd driven into back in 1979.
We've all heard that history repeats itself, but this is one of the most startlingly clear examples that I've seen. The difference today, as far as I can tell, is that in 1979 the bailout package called for Chrysler to have a clear plan going forward, and laid out strict conditions (I won't cite them here, but feel free to click on that big ol' link up there). By contrast, I've seen snippets of the recent hearings on a present-day auto-industry bailout. Irrelevant grandstanding about jets aside, these execs manifestly do not have any plan, and have admitted that they really don't know if the bailout will be enough to save the industry.

We should not stand for this. The whole tired show has been seen before. The only difference, again, between the bailouts of today and those of yesteryear is that we no longer ask for any sort of accountability. That, and a couple orders of magnitude.

Re:Bailout Bandwagon

[timmarhy]

please stop talking nonsense - where did you get this idea we are over producing? we have been unable to meet demand for years now for most commodities that are used in the production of "things". if we really were over producing we wouldn't have had such massive commodity price rises.

the issue here is purely over speculation and a lack of a reality check in the financial sector. this has resulted in no more capital left for large projects, which has a down stream effect on everything.

as for the USA not being a super power anymore, your on drugs, their military can wipe the floor with anyone. i suspect this talk of over production is a cover for some other ideology you have...

Re:Bailout Bandwagon

[russotto]

Welcome to the new socialism.

This "new socialism", where governments don't own the means of production outright, but rather have "partnerships" with private companies where the governments cover the risk and have a large degree of control (perhaps via an overseer, or "auto czar" in the case of car companies)... it looks suspiciously similar to the old fascism.

What happened to "risks of doing business"?

[Whuffo]

It used to be that if you made a poor business decision and lost money you went out of business. But somehow in the recent past someone came up with the idea that just because someone is running a business they deserve to make a profit and stay in business.

It's not just the financial institutions - now it's the car companies (stalled for the moment), airlines - and foreign businesses are lining up for a handout now too.

Why bother with improved products or competitive pricing? Let's just build a factory, make some overpriced junk, then have the government give us a bunch of money? Seems like this is the new gold rush...

Re:What about bailing out people?

[jcr]

Bail out people, not businesses.

No.

Robbing Peter to pay Paul is wrong, whether Paul is a corporation or an individual.

-jcr

Re:What about bailing out people?

[jcr]

Corporations should never get the money,

Up to this point, you're correct.

people should. ..and here's where you go wrong.

There is no action that is immoral for an individual, that becomes right when done by a collective. If I take losses in the stock market, I have no right to rob you to make up what I lost. It doesn't become right if I employ a gang of thugs to rob you. It doesn't become right if I have the government do it for me.

-jcr

Re:What about bailing out people?

[martin-boundary]

If you believe that, then I certainly don't want you for a neighbor.

Luckily, where I can or cannot live is not up to you, so your concern is unnecessary, thank you :)

Rationalization and justification aren't the same thing.

True. Justification means proving legality within a system of laws, which is exactly what I'm claiming in this instance. However, your ideological preconceptions about right and wrong have clearly caused you to rationalize an absolute opposition to government bailouts, regardless of the circumstances.

Re:Bail Out Madness

[EmagGeek]

A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been about 200 years. These nations have progressed through this sequence: '>From bondage to spiritual faith; From spiritual faith to great courage; From courage to liberty; From liberty to abundance; From abundance to selfishness; From selfishness to apathy; From apathy to dependence; From dependence back into bondage.

Alexander Fraser Tytler (1747-1813)

If it doesn't work, stop trying to fix it

[ffoiii]

Weren't DRAM manufacturers just involved in a huge price fixing scheme? Oh yeah, http://en.wikipedia.org/wiki/DRAM_price_fixing.

So the industry that flouts the law is now requesting artificial support to help them through hard times? What's the real impact if these companies fail? Their assets get sold at a discount, their creditors take a loss, and the world moves on. The technology doesn't disappear. The knowledge of their employees doesn't evaporate. If the business can't survive without manipulating the market or government support, it doesn't deserve to exist.

If DRAM is a valuable technology, somebody, somewhere, can run a business doing it. If that's not possible, then stop doing it.

Maybe everyone should just name a new industry and then mandate that people give them money. That would be so much easier, than say, actually creating value.