Taiwan considers state cash to boost some tech industries

TAIPEI, Nov 9 (Reuters): Taiwan is considering using cash from a state fund to promote greater integration among hi-tech industries struggling with a global slowdown, including the solar and flat panel sectors, the top government economic planner said Wednesday. Some T$20 billion ($664 million) in the state development fund could be used to take an active role in industry integration, Christina Liu, head of the council for economic planning and development, told reporters after a parliamentary session. "There are some industries that we think should integrate and develop, but perhaps lack cash, so we could think first about investing," Liu said, noting that flat panels was one such industry. Taiwan's tech exporters have struggled of late as a global downturn cuts demand in major markets and competition from bigger South Korean and Japanese rivals heats up. The flat panel industry has been especially hard hit, with the island's top two makers, AU Optronics and Chimei Innolux, posting big losses in the the third quarter and giving gloomy outlooks. Several companies in the sector have also put workers on unpaid leave. Some 2,800 workers were on unpaid leave as of the end of October, the government said last week. Exports account for most of Taiwan's economic growth, but export growth has slowed in recent months due to weak overseas demand. With presidential elections due in January, the government is keen to be seen helping voters, especially as the jobless rate has improved only slowly this year. Liu said that any state investment would not be in certain companies, but in industrial sectors. She noted that other countries were providing subsidies for industries. In August, Japan's government provided funding for Sony Corp, Toshiba Corp and Hitachi Ltd to merge their LCD operations in the face of stiff competition. China also funds industries it wants to develop. Liu also said she had held talks with state power utility Taiwan Power Co on the possibility of setting up a company with partial state investment that would take a role in integrating the solar industry. In a separate move, Taiwan's economics ministry said Tuesday it would help the island's LED makers, who are also facing stiff competition from South Korea and China. The ministry will help companies find new markets and ways to collaborate, and will try and boost domestic use of LED lighting in public places and as road lighting.