Analysis of Correlation between Taiwan DRAM Industry and Business Cycle
This paper subjects are the Taiwan DRAM listed companies from 2000 to 2014. The study will review the strategic alliance and acquisition activities of the international and domestic DRAM companies from the past, and state the character and present global revenue breakdown of the DRAM industry. Further we will conduct the correlation coefficient analysis between Taiwan DRAM industry and business cycle after discussing the financial analysis of the DRAM companies. The empirical results are as follows： 1. Before the financial crisis of 2007-2008: there were positive correlation between domestic business cycle and DRAM industry performance. In favor of government and bank subsidy policy, the large debt with the large capital expenditure during DRAM industry peak enhanced the company operation risk when facing the trough, which caused Powerchip and ProMos’ financial crisis. 2. After the financial crisis of 2007-2008: there were still positive correlation between domestic business cycle and DRAM industry performance. But the companies were more careful about the capital expenditure efficiency with the increasing mobile device demand, which was apparently different from the past. And the source of capital exchanged from debt to retained earnings.
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