Tue, May 12, 2009 - Page 12 News List

VIA shares increase after MOU

HELP FROM CHINA After approving a plan last week to slash 60 percent of its capital, the ailing company said that it signed a deal with China Telecom last Friday in Beijing


Shares of local chip designer VIA Technologies Inc (威盛電子) rallied close to the 7 percent daily limit after the company said it had signed a memorandum of understanding (MOU) with China Telecom (中國電信) to supply chips used in third-generation (3G) handsets and low-cost netbook computers.

VIA shares jumped 6.67 percent to end at NT$13.60 yesterday, ending a five-day decline.

“We hope the cooperation will not be limited to handset [chips]. The cooperation will extend to netbook area,” Vicky Tsai (蔡明津), a marketing director of VIA’s China unit, told the Taipei Times by telephone.

“We are very bullish about netbook demand in emerging markets. China is not only one of the fast-growing netbook markets, but also a netbook workshop. Some of our customers said they had exported half of their production from China to emerging markets,” Tsai said.

VIA’s handset chip affiliate VIA Telecom Inc (威睿電通) represented the VIA group in signing the MOU last Friday in Beijing, Tsai said.

Last week, VIA said the board approved a plan to cut 60 percent of its capital to improve its financial structure after posting losses for the last three years. In the first quarter of this year, VIA lost NT$227 million (US$6.9 million).

In related news, DRAMeXchange Technology Inc (集邦科技) raised its forecast for clone netbook computer shipments in China by 60 percent yesterday as chip giant Intel Corp decided to increase its Atom chip supply to meet sharp demand for the low-priced laptops in China, overtaking Taiwanese rival VIA as the top netbook chip supplier in China.

Beginning in February, Intel expanded its supplying of chips to include Chinese netbook computer makers such as BYD Co Ltd (比亞迪), and also extended its efforts to help Chinese motherboard makers design motherboards for netbooks, the Taipei-based research house said in a report yesterday.

Intel’s market share in China’s clone netbooks expanded to 75 percent as of last month after the US chipmaker embraced China’s clone netbook market earlier this year, the report said.

VIA used to be the only netbook chip supplier to China’s clone netbook computer manufacturers, DRAMeXchange said.

With Intel’s help, shipments of clone netbook computers in China may grow to 4 million units this year, up from DRAMeXchange’s estimate of 2.5 million units earlier this year. It did not provide figures for last year’s shipments.

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