Tue, Nov 14, 2006 - Page 11 News List

Powerchip eyes overseas share sale for expansion plans

BLOOMBERG

Powerchip Semiconductor Corp (力晶半導體), Taiwan's largest maker of computer memory chips, is seeking to raise as much as NT$11.7 billion (US$359 million) selling shares overseas to fund expansion plans.

Powerchip is selling 60 million new global depository receipts (GDRs), to be listed on the Luxembourg Stock Exchange, to international investors, according to a document sent to fund managers by Nomura Holdings Inc, which is arranging the sale with Goldman Sachs Group Inc.

The company is raising funds amid expectations of increased demand for its main product, dynamic random access memory (DRAM) chips used for storing computer data, as Microsoft Corp

prepares to sell its new, more memory-consuming Windows Vista operating system to corporate clients this month. The latest version of Windows -- the first major upgrade since 2001 -- is scheduled for general release in January.

Powerchip plans to spend NT$85 billion on new equipment and facilities this year, with investment of a similar size expected next year.

Earlier this month, Powerchip also said it is in talks to set up a joint venture with Elpida Memory Inc, Japan's biggest maker of memory chips for personal computers and consumer electronics.

Each GDR it sells is equal to 10 common shares in the company tentatively priced at NT$18.56 to NT$19.58.

The range represents a 4 to 9 percent discount on the closing price of NT$20.4 of Powerchip's Taiwan-traded shares today.

The number of new shares on offer amount to about 8.7 percent of Powerchip's enlarged share capital, based on the sale document and Bloomberg data.

The order book could be closed as early as 10:45pm.

Powerchip's net income more than tripled to NT$7.79 billion in the three months to Sept. 30, from NT$2.27 billion a year earlier.

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