Tue, Feb 01, 2011 - Page 12 News List

Powerchip to be Elpida’s only supplier

Bloomberg

Elpida Memory Inc, the world’s No. 3 maker of computer memory chips, plans to buy all of Powerchip Technology Corp’s (力晶科技) DRAM semiconductors as the companies deepen their partnership to compete against Samsung Electronics Co.

Powerchip could dedicate all its DRAM production capacity to Tokyo-based Elpida starting as early as April, Tokyo-based Elpida president Yukio Sakamoto said in an interview yesterday.

Sakamoto said in October last year he’s considering buying shares of Taiwanese chipmakers to increase capacity and compete with Samsung, the world’s biggest maker of chips that help PCs juggle multiple programs.

Powerchip and Elpida formed Rexchip Electronics Corp (瑞晶電子) in 2006 to make DRAM chips in Taiwan.

Powerchip, Taiwan’s largest memory chipmaker, said yesterday it would transition to becoming a chip foundry this year as the model will provide stable operating profit, while reporting its biggest loss in six quarters after prices fell.

The company’s NAND flash and foundry businesses will account for more than 50 percent of production by year’s end, the statement said.

Powerchip will shift from a “PC orientation” to smartphones, chairman Frank Huang (黃崇仁) said at a press briefing.

Fourth-quarter net loss was NT$8.33 billion (US$287 million), compared with profit of NT$1.6 billion a year earlier, the Hsinchu-based company said. The loss was wider than both analyst estimates compiled by Bloomberg.

Powerchip joins Nanya Technology Corp (南亞科技) and Inotera Memories Inc (華亞科技) in reporting deteriorating results after demand for the most common type of memory chip used in computers declined. The loss included a NT$4.3 billion inventory writedown, highlighting the cyclical nature of the industry, Powerchip said.

Revenue for the quarter was NT$13.3 billion, the company said. Capital spending will rise to NT$13 billion this year from NT$7 billion last year, Powerchip president Alex Wang (王其國) said. Powerchip had planned to spend NT$16 billion last year, he said.

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