Powerchip Semiconductor Corp (力晶半導體), the nation’s top computer memory chipmaker, yesterday said it had no plans to sell more assets or to seek government bailout money as it was seeing the early signs of a gradual recovery in the third quarter.
Powerchip chairman Frank Huang (黃崇仁) said severe overcapacity along with shrinking demand amid the economic recession had caused a drastic decline in chip prices, but a significant reduction in output across the industry since the fourth quarter of last year may reverse prolonged oversupply in the second half of the year.
“Following significant production cuts, we started seeing some major changes in the industry in recent months,” Huang told a press conference. “We are seeing a ray of hope to help us carry on with our business. We are seeing the cycle trend turn upward.”
PC makers have been writing off excessive inventory, which has fallen to around 800 million units this month from 1 billion at the end of last year, and they may start to build inventory in June for the PC sales season in the second half, Huang said.
As long as computer memory chipmakers make less chips than they did in the past two quarters, “supply may become constrained in the third quarter, which may help bring chip prices back to the cost level, gradually,” Huang said.
Powerchip now produces 75,000 12-inch wafers a month, only half of the company’s capacity.
“We will restore production in accordance with the price rebound,” Huang said.
Last November, Huang said Powerchip would generate cash flows after chip prices bounced back to US$1 per unit.
Seeing an uptrend, Powerchip had no plans to sell more shares of Rexchip Electronics Inc (瑞晶電子) to government-controlled Taiwan Memory Co (TMC, 台灣記憶體公司) for capital injection from the government or technological partner Elpida Memory Inc, based in Tokyo, Huang said.
Rexchip, which makes DRAM at cost-effective 12-inch fabrication units in central Taiwan, is a joint venture between Powerchip and Elpida.
Powerchip’s holdings in Rexchip dropped to about 42 percent after selling 792 million shares last week to Elpida, which now owns a 52-percent share.
Huang also said Powerchip would not consider TMC an ideal partner as he doubted any DRAM firm without factories like TMC would be able to compete with global peers.
As the DRAM industry seems to recover, Huang said the government may need to review its plan to revival the industry through the formation of TMC. TMC head John Hsuan (宣明智) said the company is scheduled to be set up in the following 3 to 6 months.
The spot price of computer memory chips, or dynamic random access (DRAM), jumped 4.54 percent to US$0.92 per unit as of 6pm yesterday from the price on Tuesday, according to market researcher DRAMeXchange Technology Inc (集邦科技), based in Taipei.
Powerchip shares rose 6.82 percent to NT$3.76 yesterday
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