Sat, Dec 27, 2008 - Page 12 News List

Powerchip requests help from MOEA

SEEKING PROTECTION A spokesman for the memory chipmaker said a proposal was delivered to the ministry yesterday afternoon, but he declined to provide specifics

By Elizabeth Tchii  /  STAFF REPORTER

Powerchip Semiconductor Corp (力晶半導體), the nation’s largest computer memory chipmaker in terms of revenue, presented an industry consolidation proposal to the Ministry of Economic Affairs (MOEA) yesterday.

Facing imminent bankruptcy, Powerchip and its smaller DRAM rival ProMOS Technologies Inc (茂德科技) have been aggressively seeking a government bailout.

Eric Tang (譚仲民), Powerchip vice president and spokesman, confirmed in a telephone call that the proposal was sent to the ministry yesterday afternoon, but declined to provide any details.

“Powerchip is deferring all comments to the ministry at this point,” he said.

In a filing to the Taiwan Stock Exchange, Powerchip said the proposal involved a three-way collaboration between Powerchip, Rexchip Electronics Corp (瑞晶電子) and Japan’s Elpida Memory Inc, information posted on the exchange’s Web site shows.

Local media speculated yesterday that Powerchip may seek more than NT$20 billion (US$605.6 million) from the government in exchange for a stake in the firm.

Rexchip is a joint venture between Powerchip and Elpida that was established in November 2006.

Hsinchu-based Powerchip held a routine board of directors meeting yesterday to discuss its consolidation proposal. Other items on the agenda included Powerchip’s syndicated loan rollover procedures, adjustments to independent board member compensation as well as next year’s planned auditor expenses and full-year budget, the exchange filing said.

Powerchip applied to the government for a loan rollover last week. The firm has NT$60 billion to NT$70 billion in bank loans, the Wall Street Journal has reported.

Topology Research Institute (拓墣產業研究所) said government aid was crucial to the DRAM industry’s survival.

“So far our government has poured trillions of NT dollars into this industry, not to mention more than NT$500 billion invested by the public and the NT$500 billion taken out in bank loans,” the Taipei-based market researcher said in an e-mail.

Not to help DRAM companies would put more than 20,000 employees and their families at dire financial risk, Topology said.

Topology said DRAM and computer industries were the economic jewels of the nation — to allow either to go under would cause unprecedented economic turmoil.

Meanwhile, Nanya Technology Corp (南亞科技), the country’s No. 2 chipmaker, was still mulling over applying for government aid.

It has not yet sought an extension on its bank loanst, citing only NT$3 billion worth of short-term obligations maturing in the first half of next year, Nanya’s spokesperson Pai Pei-lin (白培霖) said.

Asked if Nanya was putting together its own consolidation proposal, Pai said no, but did not rule out the possibility in the future.

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