Elpida Memory Inc may be the first Japanese company to trade its shares in Taiwan, but investors might not welcome its proposed Taiwan Depositary Receipts (TDR) issuance at this time, Primasia Investment Consultancy Co said yesterday.
“Elpida TDR issuance may be a wet blanket in the Taiwan market,” Primasia said in a client note, citing concerns over the weak demand for computer memory chips and persistent oversupply in this sector.
Elpida, Japan’s biggest maker of dynamic random access memory (DRAM), on Thursday announced a plan to -issue up to 200 million TDRs by next March to raise a total of ￥10.097 billion (US$120.5 million).
The Tokyo-based company said that it planned to use the new capital for the research and development of next-generation node technologies for DRAM products.
The Taiwan Stock Exchange said on Thursday that Elpida had submitted an application to issue the TDRs in Taiwan, adding that the upcoming listing, if approved by the nation’s financial regulators, serves an important step in internationalizing Taiwan’s capital market.
Primasia said Elpida’s planned issuance price of NT$18.5 to NT$20.5 per share was close to the company’s closing share price of ￥1,043 on Thursday. Shares of Elpida fell 3.04 percent to ￥1,020 yesterday in Tokyo trading.
“Compared with its peer, Nanya Technology Corp (南亞科技), which saw lukewarm demand and was undersubscribed in a mid--November offering, issued at par, too, we don’t see significant upside potential to Elpida’s planned TDRs,” Primasia said.
Primasia said it maintained a “negative” view on this TDR issuance, adding that it still held a pessimistic view on Taiwan’s DRAM industry as the weak market demand for memory chips continues amid a glut.