Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday said its board approved a plan to buy two factories and office buildings to expand capacity from local PC memory chipmaker Powerchip Technology Corp (力晶科技) for NT$2.9 billion (US$99.55 million).
TSMC has been making efforts to boost capacity to satisfy customer demand and to fend off growing competition as the Hsinchu-based chipmaker budgeted a record-high US$5.9 billion in capital spending for last year, and it plans to spend even more this year.
TSMC said in a filing to the Taiwan Stock Exchange that the factory and office buildings, located in Hsinchu, were under construction and would be used for chip production in the future.
The deal will help mitigate financial pressures on Powerchip as the company faces a cash crunch because, despite a brief revival, PC memory chip prices plunged last quarter nearly 50 percent quarter-on-quarter.
The deal is part of Powerchip’s efforts to sell non-core businesses to improve its financial structure and to increase operating capital, with an aim to get the company’s operation back on track amid the industry’s slump, Powerchip said in a statement submitted to the stock exchange.
Powerchip chairman Frank Huang (黃崇仁) said on Monday that he forecast the chip industry to hit bottom in first quarter, before rebounding on the back of recovering demand. To cope with the rebound, the chipmaker expected to ramp up production ahead of schedule this quarter of chips using advanced 40--nanometer technology.
Powerchip’s board yesterday also approved the management’s plan to negotiate a bank loan rollover with credit banks.
On Monday, Powerchip said to boost its operating capital it had secured NT$302 million by selling 3.57 million shares of local chip designer Zentel Electronics Corp (力積電子).
The company also said it has reached a new agreement with Rexchip Electronics Inc (瑞晶電子) to resume shipments of chips after Rexchip suspended its supply last week because of balance of payment delays by Powerchip.
Rexchip is a PC memory chip manufacturing venture between Powerchip and Tokyo-based Elpida Memory Inc.
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