Thu, Dec 26, 2002 - Page 10 News List

Silicon Integrated sells stock worth US$138mn

BLOOMBERG , HSINCHU

Silicon Integrated Systems Corp (矽統), the world's third-largest maker of computer chipsets, said it sold US$138 million of new shares overseas to help pay off bank loans and buy new equipment for its first chip plant.

The company sold 25 million global depositary receipts with each unit equivalent to 10 local shares. The price was equal to US$0.55 (NT$19.2) per share, or a discount of 15.4 percent to yesterday's closing price.

"We decided to sell the shares at a discount after considering the capital-market situation," spokeswoman Irene Hsiao said. SinoPac Securities Co (建華證券) arranged the sale, she said.

Silicon Integrated shares rose NT$1.5, or 6.6 percent, to close at NT$24.2 per share on the TAIEX after the company said United Microelectronics Corp (UMC, 聯電), the world's second largest supplier of made-to-order chips, may buy a stake in the company.

Silicon Integrated said it will invite UMC to take three seats on its board after the two companies settled a patent dispute.

The size of the stake will be decided at a Silicon Integrated board meeting on Jan. 14, Hsiao said.

Silicon Integrated originally was a chip designer that used UMC as its manufacturer. After opening its own semiconductor plant, Silicon Integrated ceased placing orders. The new tie-up may change that, analysts said.

"UMC should get more orders from Silicon Integrated," said Simon Chao, who counts shares in UMC among the NT$700 million he helps manage at President Investment Trust Corp (統一投信). "The companies will form an alliance if the legal problems are settled."

UMC shares gained NT$0.20, or 0.9 percent, to close at NT$22.20 per share.

Silicon Integrated and UMC declined to comment on a report on Taiwan's Kimo Web site that UMC would buy some of the shares Silicon Integrated sold overseas.

"Buying shares in Silicon Integrated is one way we could gain the board seats," said Liu Chitung (劉啟東), investor relations chief at UMC. "The majority shareholders could also offer the seats to us."

The company plans to offer the empty seats to UMC, she said.

UMC said it hasn't reached a final settlement with Silicon Integrated on their patent dispute.

Silicon Integrated stopped buying chips from UMC two years ago after starting production from its first chip plant. UMC earlier charged Silicon Integrated with patent violations in a US lawsuit.

Meanwhile, UMC said it's meeting expectations the company set for the fourth quarter. ``We had some rush orders in November,'' said Liu. ``The orders will help us top the better end of our guidance.''

The company's November sales rose 25 percent from a year ago to NT$6 billion (US$172.4 million) from NT$4.8 billion. Sales in November were unchanged from October.

UMC's third-quarter sales were NT$19.2 billion. Based on the company's forecast, fourth-quarter sales may be as much as NT$17.3 billion, representing an increase of 24.5 percent from the same period a year ago.

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