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ProMOS says it's not a takeover target

ProMOS Technologies Inc (茂德科技), Taiwan's No. 2 memory-chip maker, dismissed speculation it may be a takeover target and said the company aims to become independent after Infineon Technologies AG sold its stake.

ProMOS plans to use technology from Japan's Elpida Memory Inc to fill the gap left by technology provider Infineon and lessen its dependence on Taiwan parent Mosel Vitelic Inc (茂矽), ProMOS spokesman Albert Lin (林育中) said in an interview.

Plans by ProMOS's two biggest shareholders to reduce their stakes have raised questions over control of the seven-year-old venture as prices of dynamic random-access memory chips rebound.

Munich-based Infineon said on Monday it has completed the sale of its 30 percent holding, while biggest shareholder Mosel plans to sell part of its one-third stake to pay debt.

"ProMOS is an ideal takeover target for other semiconductor makers, because it has the most advanced DRAM production plant in Taiwan just as the industry is going into a cyclical upturn," said Phil Chen, who counts ProMOS shares in his US$46 million High-Tech Fund at Grand Cathay Securities Investment Trust Co (大華投信). "ProMOS is best positioned to benefit from the recovery."

Infineon said in January it would sell its ProMOS stake following a dispute with Mosel over control of the venture. The German company ended technology and purchasing agreements with ProMOS last year.

Lin dismissed a Chinese-language newspaper report that United Microelectronics Corp (聯電), the world's second-biggest supplier of made-to-order chips, may buy a controlling interest in ProMOS. He also denied a report by the newspaper that Intel Corp, the world's biggest chipmaker, may take a stake.

"We are just breaking free from the control of two parents, so that wouldn't make sense," he said. "Intel's strategy is to keep enough DRAM makers afloat to maintain healthy competition in the market, rather than trying to control one of them."

ProMOS hopes a technology-sharing agreement signed in May with Elpida, a venture of Hitachi Ltd. and NEC Corp, will enable the Taiwanese company to upgrade its technology. ProMOS intends to design memory chips with 0.1-micron technology provided by Elpida.

"Once we've finalized the technology agreement with Elpida, we can run as an independent player rather than just a part of someone," Lin said.

ProMOS last month said its second-quarter loss narrowed by two-thirds to NT$492 million (US$14 million) and forecast it will turn profitable for the remainder of the year as prices improve.
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