Fri, Jul 20, 2007 - Page 11 News List

ProMOS inks NT$20.7bn loan to finance new fab

NANOTECHNOLOGY The money will help pay for the expansion of the company's third 12-inch factory in Taichung, which is going online sooner than expected

By Lisa Wang  /  STAFF REPORTER

ProMOS Technologies Inc (茂德科技), the nation's third-biggest maker of computer memory chips, signed a NT$20.7 billion (US$630 million) syndicated loan yesterday to finance the expansion of a 12-inch fab.

The company said it would use the money primarily to fund the expansion of its third 12-inch factory, located in Taichung, according to the company's filing with the Taiwan Stock Exchange.

"The capital injection will help ProMOS speed up production using cost-saving 70-nanometer technology and thereby fuel the company's growth," ProMOS spokesman Ben Tseng (曾邦助) said in the filing.

The new plant is expected to start mass production in October, one-and-a-half months earlier than scheduled, Tseng said.

The plant is expected to produce 15,000 12-inch wafers a month.

Shares of ProMOS closed unchanged at NT$13.3 on the GRETAI Securities Market yesterday, compared with a 0.67 percent increase on the over-the-counter index.

The five-year syndicated loan was offered by a group of 13 banks, including the Bank of Taiwan (台灣銀行), Taiwan Business Bank (台灣中小企銀), Land Bank of Taiwan (台灣土地銀行) and Taiwan Cooperative Bank (合作金庫銀行).

On the sidelines of the signing ceremony, Taiwan Cooperative president Chen An-hsiung (陳安雄) told the Dow Jones Newswire that ProMOS reported a second-quarter loss of NT$2 billion to NT$3 billion.

The Hsinchu-based company, however, denied the report when contacted by the Taipei Times.

"Those are not our figures," a ProMOS official said yesterday on condition of anonymity because she was not authorized to speak to the media.

The company is scheduled to release its second-quarter financial report early next month.

The company posted a profit of NT$4.33 billion, or NT$0.66 earnings per share, in the first quarter.

In April, it raised its spending on new facilities and equipment to around NT$1.88 billion for this year, from a previous estimate of NT$1.2 billion.

Credit Suisse on Tuesday upgraded ProMOS and bigger rival Powerchip Semiconductor Corp (力晶半導體) to "outperform" as the industry may hit the bottom in one or two quarters.

The brokerage house also warned that computer memory chipmakers would post weak profits for the second and third quarters but show improvement in the fourth quarter.

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