Powerchip to make flash memory chips for Renesas

Powerchip Semiconductor Corp (力晶半導體), Taiwan's third-largest maker of computer memory chips, said it will co-operate with Japan's Renesas Technology Corp to make flash-memory chips for use in digital cameras and mobile phones.

Hsinchu-based Powerchip plans to spend NT$20 billion (US$581 million) on expanding production after concluding the agreement with Renesas, a venture between Mitsubishi Electric Corp and Hitachi Ltd, Powerchip spokesman Eric Tang (譚仲民) said.

The tie-up is the second Powerchip has reached with a Japanese chipmaker this year. The Taiwan company said in March it will sell as much as half of production from its newest plant this year to Elpida Memory Inc, a venture in which Hitachi, Japan's biggest electronics maker, is also a partner.

The company expects a second-quarter loss of NT$900 million before returning to profit in the second half, Powerchip president Brian Shieh (謝再居) told a press conference. The company expects its second-half profit to exceed its first-half loss, Shieh said.

Powerchip reported a loss of NT$2 billion for the three months ended March 31.

The company plans to raise US$250 million to US$350 million in the fourth quarter selling global depository receipts and bonds convertible into its shares, chairman Frank Huang (黃崇仁) said in an interview after the press conference.

Powerchip, which raised US$112 million selling bonds convertible into its shares this month, plans to more than double its production of 12-inch silicon wafers to 36,000 a month by the end of next year, Tang said.