Sat, Jul 04, 2009 - Page 12 News List

Powerchip’s June sales surged on recovering demand


Powerchip Semiconductor Corp (力晶半導體), the nation’s largest computer memory chipmaker, yesterday reported that sales last month reached NT$2.12 billion (US$64.46 million), its highest in eight months, as average selling prices improved on rebounding demand.

Sales last month surged more than 40 percent from NT$1.51 billion in May.

On a year-on-year basis, however, sales last month were down 66 percent, because demand was comparatively weaker amid the global economic recession.

“Selling prices and shipments both increased, resulting in an increase in sales [value] in June,” company spokesman Eric Tang (譚仲民) said in a statement.

Powerchip’s share price plunged, however, 6.71 percent to close at NT$2.64, dragged down by the company’s announcement that it was offering 800 million new shares for investors to convert their bond into shares.

The Hsinchu-based firm said last week that shareholders had approved a company plan to reset terms on the redemption of US$158 million in overseas convertible bonds.

Powerchip set the conversion price at NT$5.25 each, which is only one-fourth of its previous conversion price of NT$20.17.

Powerchip is the second local dynamic random access memory (DRAM) firm after ProMOS Technologies Inc (茂德) to adjust its bond contract with investors after experiencing financial difficulties amid a slowing economy.

To meet recovering demand, the company s restored part of its production in the middle of May after halving the number of employees on forced unpaid leave.

The company also said it had begun mass production of next-generation, or DDR3, memory chips and was aggressively seeking to win orders from computer makers to resolve current supply constraints.

The contract prices for DDR3 chips next month are expected to rise by between 5 percent and 10 percent from last month as computer makers promote ultra-low-voltage notebook computers, DRAMeXchange Technology Inc (集邦科技) said.

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