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ProMOS, Taiwan Memory reach deal

Local computer memory chipmaker ProMOS Technologies Inc (茂德科技) said yesterday it had reached an agreement with Taiwan Memory Co (TMC, 台灣創新記憶體公司) to make chips for the government-backed memory company using new technologies they will jointly develop.

Share prices of ProMOS spiked 6.67 percent to end the day at NT$1.28 in Taipei trading after the partnership was announced.

The partnership will make ProMOS the first chip supplier of TMC and is seen as a crucial step for the money-losing ProMOS to make a comeback.

“We have a consensus with TMC to jointly develop technologies using our [12-inch] plant in Taichung. Our engineers will join the research and development efforts,” Ben Tseng (曾邦助) said by telephone, confirming a report by the Chinese-language Economic Daily News yesterday.

“It will be natural for us to use the plant to make dynamic random access memory [DRAM] for TMC in the future. There will be no waste of time or equipment or technological adjustment,” Tseng said.

TMC chairman John Hsuan (宣明智) said in April that the company would not operate plants and would seek chip supplies from outside in an effort to consolidate local chipmakers’ capacities.

The government said in June that TMC had requested a NT$10 billion capital injection from the government to help it buy a 9.5 percent share of Japan’s Elpida Memory Inc, which TMC picked as its technological partner in April.

ProMOS and other local DRAM companies have been experiencing continual quarterly losses over the last two years amid an industry slump.

But these companies have recently seen rising chip prices, which in turn has boosted their share prices.

Yesterday, shares of the nation’s top DRAM makers Nanya Technology Corp (南亞科技) and Powerchip Semiconductor Corp (力晶半導體) rallied by nearly the 7 percent daily limit to NT$21.5 and NT$2.95 respectively, on the back of strong DRAM prices. That was compared with a 0.66 percent rise on the TAIEX.

“The contract price of [mainstream] DDR2 [memory] has rebounded to US$2 per unit in the second half of September, which has not been seen in two years,” Nanya spokesman Pai Pei-lin (白培霖) said by telephone.

“We cannot satisfy customer demand. We can only supply 60 percent or 70 percent of orders,” he said.

Pai attributed a better than expected demand for computers for the resilient recovery.

“We feel that the demand is substantial,” he said.

That may support another round of price hikes next month, Pai said. In September alone, the contract chip price has jumped 20 percent month on month, he said.

ProMOS said it would end its policy of forcing employees to take unpaid leave, starting next month, Tseng said.
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