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Grace Corp may again delay IPO

Grace Semiconductor Corp (宏力半導體), a Chinese company that postponed its first public share sale in the fourth quarter last year, said it may delay the stock offering for the second time as chip demand stalls.

"The semiconductor market isn't very good this year," said Lynette Lu, a spokeswoman for the Shanghai-based company, responding to a report today on the Silicon Strategies Web site.

Global growth in chip sales this year will stall from last year, when it rose 28 percent record of US$213 billion, the San Jose, California-based Semiconductor Industry Association said on Jan. 31. Chipmakers have been eliminating excess inventory since late last year.

Semiconductor Manufacturing International Corp (中芯國際 集成電路), on March 12 last year raised HK$14 billion (US$1.8 billion), the maximum sought from its Hong Kong first share sale. The stock has lost 40 percent of its value since it first traded on March 17.

Shares of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world's largest made-to-order chip supplier, have lost a 10th of their value in the period.

Grace in March last year said it aimed to sell shares on the New York Stock Exchange to help raise money for expansion.

Grace may aim for an IPO next year if it can make a profit this year, the Silicon Strategies Web site reported, citing Grace Chairman Zou Shichang (鄒世昌). Grace spokeswoman Lu declined to comment on Grace's profit expectations.

"We can't be too optimistic about the overall demand picture" for chipmakers, said Winson Fong, who counts shares in Semiconductor Manufacturing among the equivalent of US$2.3 billion he helps manage for SG Asset Management in Singapore. "There won't be very strong economic growth like we saw last year."

Global chip sales in the fourth-quarter last year fell 0.8 percent to US$55.1 billion from the previous period, the semiconductor association said. Profit growth has slowed for TSMC. The company's fourth-quarter net income rose 39 percent to NT$22.2 billion (US$697 million), or NT$0.96 per share, from NT$16 billion, or NT$0.69, a year earlier.

Chartered Semiconductor Manufacturing Ltd (特許半導體), Singapore's biggest chipmaker, today said first-quarter sales will be less than it forecasted and the net loss will be "at the higher end" of predictions.
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