Inotera outlines plans for IPO

Inotera Memories Inc (華亞科技) will file for an initial public offering (IPO) on Taiwan's main bourse in the middle of next month to fund the construction of a second plant, but didn't say how much it expects to raise from the debut.

Inotera is a 50-50 memory-chip venture between Infineon Technologies AG and Nanya Technologies Corp (南亞科技).

Inotera's shareholders approved a proposal to trade its shares on the Taiwan Stock Exchange in a meeting yesterday, the company said.

Shareholders also appointed independent directors and supervisors, it added. The new board has 16 members, up from 10.

The IPO is part of Inotera's broader plan to raise funds for a new plant, said Karlheinz Horninger, vice president of Inotera, in a phone interview.

New factory

Inotera's new plant will use 12-inch technology, with the cost similar to its first one, at around US$2.2 billion, according to Horninger.

Inotera, which makes dynamic random access memory chips used in computers, expects to list on the Taiwan Stock Exchange in the first quarter of next year after receiving approval from the nation's stock exchange regulator by the year's end, the company said.

After the IPO, Inotera also plans to issue new shares as approved by its shareholders, company president Charles Kau (高啟全) told the Taipei Times.

"But, we haven't set the size, date or details of the share sale," Kau said.

Frank Wang (王安亞), who tracks the memory-chip industry for Morgan Stanley in Taipei, responded favorably to the firm's plan.

`Reasonable' price

"The P/B [price-to-book] ratio at one to two times will be quite reasonable," he said.

Nanya Technologies and bigger rival Powerchip Semiconductor Corp (力晶導體) are traded at about 1.5 times, he said.

P/B ratios are an important indicator for investors to gauge values of stocks. Stocks are viewed as cheap when their P/B ratios are low, and expensive when their PB ratios are high.

Wang projected Inotera would record roughly NT$4 billion (US$120.17 million) in profits in the second half of the year. It made NT$2.9 billion in the first six months of the year, translating into earnings per share of NT$1.17.

Intotera said in April that it planned to complete its second factory by the end of next year, with production levels similar to its first plant.

Monthly production at its first plant has risen to 50,000 wafers, which is ahead of schedule, Horninger said.

The company plans to boost production to 54,000 wafers a month by the end of the year.