Wed, Oct 01, 2008 - Page 11 News List

Nanya lowers hopes for third quarter

BLOOMBERG

Nanya Technology Co (南亞科技), Taiwan’s second-largest memory chipmaker, said its third-quarter loss would be worse than the company projected after a glut drove down semiconductor prices.

The loss will probably be similar to the deficit in the second quarter, Pai Pei-lin (白培霖), vice president of the Taoyuan-based chipmaker, said in an interview yesterday.

Nanya, which posted a second-quarter loss of NT$7.29 billion (US$226 million), is expected to report a third-quarter loss of NT$6.1 billion, according to the median analyst estimate compiled by Bloomberg.

The company will probably extend losses next quarter as the turmoil in global financial markets spills over to semiconductor demand, preventing chipmakers from selling their products at a profit, Pai said.

Spot prices of the benchmark computer-memory chip have tumbled 35 percent in the past three months, DRAMeXchange Technology Inc (集邦科技) said in Taipei.

“For the month of October, we don’t expect to see any major improvement,” Pai said.

“November, December are going into the low season and I doubt anything significant will happen in that time,” he said.

In July, the company forecast that the third-quarter loss would narrow from the previous quarter.

Separately, Nanya avoided the credit crunch as it raised NT$20 billion from a five-year syndicated loan this month before the collapse of Lehman Brothers Holdings Inc roiled financial markets, Pai said.

“We did it before all this Wall Street fiasco happened, so we got a pretty good deal I think, the interest rate is pretty low,” Pai said, declining to provide details on the rate.

Half the loan will be used to repay a convertible bond coming due this month, while the rest will fund operations, he said.

The money will last “a few quarters” and Nanya plans to raise more funds next year, Pai said.

Nanya would probably raise future funds by selling stock or convertible bonds instead of through loans, he said.

“The current Wall Street situation is not very favorable for people to raise capital,” Pai said.

“So there’s no concrete proposal yet,” he said.

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