Wed, Oct 15, 2003 - Page 10 News List

ProMOS turns it around, reports NT$864m profit

BLOOMBERG

ProMOS Technologies Inc (茂德科技), the nation's second-largest maker of computer memory chips, had profit of NT$864 million (US$26 million) in the third quarter, ending two quarters of loss.

The July to September figure, based on unaudited numbers, compares with a loss of NT$1.7 billion a year ago. Sales rose by almost three-fifths to NT$4.7 billion from NT$3 billion.

The company profited because it has become more independent from parents Infineon Technologies AG of Germany and Mosel Vitelic Inc (茂矽), ProMOS vice president Albert Lin (林育中) said.

ProMOS is one of the first in the world to open a factory that makes larger silicon wafers that help cut production costs by a third.

ProMOS, which last year sold about 80 percent of its output to Infineon, sold about 40 percent of production to other contract clients in the third quarter, including Hewlett-Packard Co. Infineon sold its stake in ProMOS earlier this year after Mosel took control of the unit in a January shareholders's meeting.

ProMOS expects to free itself of ties to Mosel in the fourth quarter this year. The company said it has hired an unidentified accounting firm to assess how much ProMOS should pay Mosel to buy patents and other intangible assets.

The company plans to increase spending for expansion next year to US$310 million from US$185 million this year.

It will start construction of a second plant that makes 12-inch silicon wafers, which more than double the number of chips that can be made from standard eight-inch discs.

ProMOS plans to raise as much as US$300 million in the first quarter next year to help fund expansion, Lin said.

The company expects to shoulder about half of the investment in the plant. Two partners, which ProMOS declined to identify, will assume the remainder of the investment, he said.

The new plant will produce chips with so-called "stacked" production technology that it's been negotiating with Japan's Elpida Memory Inc to acquire, Lin said.

ProMOS currently uses trench technology from Infineon.

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