Powerchip bid for control of Macronix International fails

Powerchip Semiconductor Corp (力晶半導體), the nation's biggest computer memory chipmaker, failed to win control of local memory chipmaker Macronix International Corp (旺宏電子) in a management battle yesterday.

Powerchip only obtained two seats on the 15-member board of Macronix during the boardroom election yesterday. Led by Frank Huang (黃崇仁), Powerchip said earlier that it wanted to win eight seats on Macronix's board to secure its control.

Macronix's existing management team, led by chairman Miin Wu (吳敏求), scored a landslide victory by securing 13 seats and thereby control of the company's operation.

The results of the boardroom election came after the local stock market closed. Shares of Powerchip fell 0.3 percent to NT$20, while Macronix saw its stocks fall 2.2 percent to NT$15.55.

"We thought Macronix was a company worth investing in. We hope to better understand the company. If not, we will consider selling our holding," Powerchip vice chairman Michael Tsai (蔡國智) told reporters on the sidelines of Macronix's annual shareholder meeting.

Demand for flash memory chips, which are used to store songs and pictures in music players and digital cameras, has been on the rise in the past few years.

Sensing the growth potential of Macronix, which makes flash memory chips used in game consoles, Powerchip has increased its holdings in Macronix since last year and holds a 5.34 percent stake in the smaller rival.

The boardroom fight at Macronix regained media attention after Powerchip asked shareholders to elect its representatives to the board to help improve Macronix's cost-saving abilities in the long term.

But Wu asked shareholders to reject Powerchip representatives, saying that Powerchip only aimed to obtain Macronix's patents and technologies.

While criticizing Huang's past insider trading allegations, Wu also accused Powerchip of hoping to use control over Macronix for personal benefit, which Powerchip said was untrue.

Huang is currently under investigation for suspected involvement in an insider trading scandal involving Veutron Corp (力廣科技), a Powerchip affiliate.

Tsai said the company would not rule out the possibility of filing an injunction against Macronix next Tuesday for proxy vote collection controversy.