ProMos cuts forecast, posts worse-than-expected loss

ProMos Technologies Inc (茂德科技), Taiwan's fourth-largest computer memory-chip maker, slashed its 2002 pretax profit forecast 96 percent and reported a worse-than- expected loss for the second quarter after chip prices fell.

The venture between Mosel Vitelic Inc (茂矽) and Infineon Technologies AG of Germany cut its forecast to NT$195 million ($6 million) from NT$5 billion four months ago, saying it expects sales to drop slightly more than a quarter to NT$20.7 billion.

Consumers are buying more computers and companies aren't, ProMos spokesman Albert Lin (林育中) said.

``We're not certain we'll be profitable in the third quarter,'' Lin said. ``The fourth quarter should be better than the third.''

The company's loss in the second quarter widened to NT$1.38 billion (US$40 million) from NT$1.37 billion a year ago. That lagged the average NT$594.6 million loss forecast by analysts. Sales rose 43 percent to NT$4.2 billion, the company said earlier.

Global computer shipments slid in the three months ended June 30 for a fifth straight quarter, according to International Data Corp. Yesterday, Schroder Salomon Smith Barney cut its 2002 sales growth estimate for the global semiconductor industry to 0.5 percent, down from a previous estimate of 4 percent.

The price of a benchmark dynamic random access memory (DRAM) chip has fallen three-fifths since peaking this year at $4.36 on March 5, according to DrameXchange.com, a Taiwan-based clearing house.

The chip, with capacity for 128 megabits of memory, operates at a speed of 133 megahertz.

ProMos said it wrote down its chip inventory by more than NT$700 million and took a charge of as much as NT$900 million in depreciation on its four-month-old Hsinchu plant that produces 300- millimeter silicon wafers.

The chipmaker said in April that it didn't expect the plant to turn a profit until the fourth quarter because chips take three months to manufacture.

ProMos expects to triple spending to NT$20.65 billion next year for expansion from an estimated NT$7.47 billion this year, Lin said.

ProMos rivals Powerchip Semiconductor Corp (力晶半導體) and Nanya Technology Corp (南亞科技) also slashed their earnings forecasts in the past month because of lower-than-expected chip prices.