Sat, Dec 13, 2008 - Page 12 News List

Powerchip may seek relief funds


Frank Huang, chairman of Powerchip Semiconductor Corp, delivers a keynote speech at SEMICON Japan 2008 in Makuhari, Japan, on Wednesday last week.


Powerchip Semiconductor Corp (力晶半導體), the nation’s top computer memory chipmaker, is considering seeking government relief funds to help it through the most severe slump in the industry’s history, a company executive said yesterday.

Powerchip will become the second local computer memory, or DRAM, chipmaker seeking a government bailout if it turns the idea into reality.

At the financial breaking point, the nation’s third-largest DRAM maker ProMOS Technologies Inc (茂德科技) made the first call for government help.

“We are brainstorming on how to weather this tough period by ourselves. This is one of many ways we came up with to save us,” Powerchip spokesman Eric Tan (譚仲民) told the Taipei Times by telephone.

“Specifically, it is one of the company’s options to ask the government to buy a stake in Rexchip Electronics Co (瑞晶),” a venture between Powerchip and Tokyo-based memory chipmaker Elpida Memory Inc, Tan said, confirming a report by the Chinese-language the Economic Daily News.

The move may be a new sign of an accelerated slowdown in demand. Powerchip chairman Frank Huang (黃崇仁) said on Nov. 21 that the company would not need government support unless the price of DRAM chips fell more than the company expected.

The price for benchmark DRAM chips slid an additional 0.33 percent yesterday to average US$0.6 per unit after a 9 percent decline last week, according to market researcher DRAMeXchange Technology Inc (集邦科技), based in Taipei.

“We want to work closely with Elpida to get through this difficult time,” Tan said.

Elpida planned to raise its stake in Rexchip to 52 percent by buying shares from Powerchip by next March in a deal worth about NT$1.3 billion, from current holding of 48.8 percent, Powerchip said last month.

Rexchip may play a central role in combining other Taiwanese DRAM makers, Tan said, while inching toward a breakthrough in the government’s push for industry consolidation.

“We have discussed this internally, but no substantial timetable has yet been set,” Tan said.

He believes that the latest industrial downturn would force DRAM players into a new round of consolidation. A glut has driven down chip prices to historical lows in which not a single company could make a profit.

Rexchip makes 80,000 12-inch wafers a month at a plant located in central Taiwan. The wafers are to cut into memory chips used in PCs.

Shares of Powerchip fell by 6.86 percent to NT$3.26. Local rivals Nanya Technology Corp (南亞科技) dropped 5.7 percent, while ProMOS jumped 5.67 percent.

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