Taiwan's government may inject up to NT$30 billion (US$867 million) into Taiwan Memory Co., the new company that will combine the island's memory-chip makers and it hopes to attract more funds from private investors.

John Hsuan, who was named last week to oversee the creation of Taiwan Memory Co., said Tuesday potential private investors include local and foreign dynamic random access memory chip makers.

Speaking to reporters, Hsuan said he plans to meet with three prospective investors this week, including foreign equity funds, but he declined to reveal names.

Hsuan, a former vice chairman at United Microelectronics Corp., said he also plans to visit executives at Japan's Elpida Memory Inc. (6665.TO) and Micron Technology Inc. (MU) of the U.S. in two weeks to discuss obtaining access to their chip technologies and patents.

If Taiwan Memory gains access to key technologies and has independent research capability, the company can expand the development of DRAM chips for a wider range of products including mobile devices, he said.

The government hopes to select a partner for Taiwan Memory by the end of March and sign a deal within three months, Hsuan said.

The Taiwan government said mid-December it plans to consolidate the island's DRAM makers, which have been suffering from steep losses amid a supply glut. Last week, Taiwan unveiled key details to consolidate its ailing sector, announcing plans to set up the new company. Minister of Economic Affairs Chii-Ming Yiin said last Thursday the government will own less than 50% of Taiwan Memory and the company will seek an alliance or merge with either Elpida or Micron.

Commenting on the industry outlook, Hsuan said there is still no sign of an industry recovery.

"I don't think there will be a strong recovery even after the global financial crisis is over," Hsuan said.

He doesn't expect the increasing popularity of netbooks - low-cost laptop computers - and a new version of the Windows operating system, Windows 7, to spur a significant increase in demand for DRAM chips.

DRAM chips are most widely used in PCs.

-By Jessie Ho, Dow Jones Newswires; 88622 502-2557; jessie.ho@dowjones.com