Sat, Dec 06, 2008 - Page 12 News List

ProMOS denies plans to shutter all production

By Lisa Wang  /  STAFF REPORTER

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ProMOS Technologies Inc (茂德科技), the nation’s third-largest computer memory chipmaker, yesterday said it might cut output at a faster-than-expected pace to stem losses, but has no plans to completely shut down operations.

ProMOS spokesman Ben Tseng (曾邦助) said the company “operates normally and any speculation about any new factory closure is untrue.”

Tseng made the remarks in the wake of a report yesterday by the Chinese-language Commercial Times that ProMOS had shut down two plants, including an advanced 12-inch factory in Hsinchu and a less cost-efficient 8-inch plant, because of a cash crunch.

The report said gas suppliers had stopped supplying ProMOS gas it uses to clean wafers at its 8-inch and 12-inch fabs in Hsinchu, northern Taiwan.

Speculation about its possible closure has mounted as ProMOS posted the biggest nine-month loss and has the weakest balance sheet among the nation’s major manufacturers of dynamic random access memory (DRAM) chips.

OUTPUT CUT

To cope with the economic downturn, ProMOS said it might cut output this quarter by more than 20 percent from last quarter — instead of the 15 percent cut it said in October — and had asked employees to take unpaid leave since last month, Tseng said by telephone yesterday.

ProMOS and its local peers have recently been in the media spotlight as a global supply glut and economic turbulence have caused huge losses for all chipmakers and they are seeking financial support to help them weather the industry’s severest slump in history.

“We’ve held discussions with the government about our strategies and measures [to cope with the downturn], and we hope the government will show its support for the industry,” Tseng said, without elaborating.

ProMOS is the only local DRAM company that has made public its desire for government support. The company’s sales dropped 42 percent year-on-year last month to NT$1.37 billion (US$40.8 million), or a 32 percent month-on-month decrease, it said in a stock exchange filing.

In the middle of last month, the government set up a cross-ministerial special task force to map out a rescue plan for cash-strapped DRAM chipmakers.

Industrial Development Bureau Director-General Chen Chao-yih (陳昭義), a member of the task force, said yesterday that the government was evaluating measures to save the DRAM industry, including helping chipmakers rollover their bank loans and pushing for industrial consolidation.

“One of the subjects of intensive debate was whether the government should get involved [in the industry consolidation],” Chen said, adding that they would hold more discussions before making a final decision.

On Wednesday, the legislature’s Economics Committee approved a Cabinet proposal to expand the size of the Cabinet’s National Development Fund (國發基金) to NT$100 billion.

The fund is largely used to promote the development of vital industries and cutting-edge technologies.

CONSOLIDATION

The legislature also approved a resolution on Wednesday requesting the government to push for consolidation in the DRAM industry if it wanted to use part of the NT$100 billion fund to rescue the industry, rather than simply injecting capital into the chipmaking companies.

“Or else it would be a waste of taxpayers’ money,” Democratic Progressive Party (DPP) Legislator Pan Meng-an (潘孟安) said at the time.

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