Tue, Jan 06, 2009 - Page 12 News List

Powerchip working on fresh bailout proposal

By Lisa Wang  /  STAFF REPORTER

Powerchip Semiconductor Corp (力晶半導體), the nation’s biggest computer memory chipmaker, said yesterday it was continuing talks with Japanese partner Elpida Memory Inc to file a new bailout proposal.

The statement came after a joint bailout proposal by Powerchip and its Japanese partner Elpida filed last month failed to gain approval from the government.

The proposal primarily was aiming to create a platform for industry consolidation involving Rexchip Electronics Inc (瑞晶電子), a venture between Powerchip and Elpida, Powerchip said in a press release yesterday.

“Powerchip will continue to communicate with Elpida to come up with a revised proposal that will meet government expectations and help the nation’s DRAM [dynamic random access memory] chipmakers upgrade their technologies, as well as come up with a long-term integration plan,” Powerchip said in the statement.

Speculation circulated that Powerchip planned to merge smaller rival ProMOS Technologies Inc (茂德科技) with Rexchip and transform ProMOS into a research and development center, but Powerchip declined to confirm the rumors.

Separately, Powerchip said company chairman Frank Huang (黃崇仁) would not receive pay until the chipmaker becomes profitable again as part of the company’s cost-saving efforts after it slashed its payroll for senior executives by 10 percent to 20 percent last month.

With the cost-saving plan, Powerchip hopes to ride out the industrial slump on its own rather than counting on a government bailout, it said in the press release.

“With cost-saving efforts and migrating to advanced technologies and its own plan, the company will not need the government’s capital injection to fare the downturn,” Powerchip said in the statement.

The Hsinchu-based chipmaker also plans to save cash by selling non-core assets, the statement said.

In August and September, Powerchip obtained NT$673 million by selling shares in Shin Kong Financial Holding Co (新光金控) and local touch panel drive IC maker Elan Microelectronics Corp (義隆電子).

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