Wed, Jul 04, 2012 - Page 14 News List

Powerchip Technology’s sales hit 11-month high

HAPPIER TIMES:The company expects to maintain its sales momentum because DRAM prices have become stable and it has begun 30 nanometer mass production

By Kevin Chen  /  Staff reporter

Powerchip Technology Corp (力晶科技) yesterday saw its sales hit an 11-month high last month on rising prices and improved foundry business.

Sales were NT$2.64 billion (US$88.4 million) last month, up 2.52 percent from the previous month, but down 30.13 percent from the same month last year, the Hsinchu-based memorychip maker said in a statement.

Last month’s figures represented the highest since July last year, when the company posted NT$3.93 billion in sales, company data showed.

Commenting on the company’s 2.52 percent monthly increase in sales, Powerchip spokesman Eric Tang (譚仲民) said the firm had “slightly raised” prices of PC DRAM chips and pointed to “foundry business growth” as memory foundry customers compete for capacity.

Thanks to rising DRAM prices, sales for the second quarter totaled NT$7.49 billion, up 37.43 percent from the first quarter, but the number remained 38.19 percent lower than a year earlier. In the first six months of the year, total sales fell 43.28 percent to NT$12.94 billion from the year before, data showed.

Looking ahead, Tang said he expected Powerchip to maintain its sales growth momentum because DRAM prices have become stable in the near term and the company’s 30 nanometer process technology has already begun mass production.

“Together with visibility of orders from foundry customers to the end of the year, Powerchip’s operations are expected to improve during the second half of the year,” Tang said in the statement.

Shares of the memorychip maker continued rising yesterday for a second day, after US-based Micron Technology Inc agreed on Monday to acquire the Powerchip Group’s 24 percent stake in Rexchip Electronics Corp (瑞晶電子) for NT$9.696 billion at NT$14.03 a share.

Rexchip is a PC memorychip manufacturing venture between Powerchip and Japan’s Elpida Memory Inc.

The proceeds from the share sale are expected to help ease Powerchip’s financial woes.

In the first quarter, Powerchip’s net losses totaled NT$5.57 billion, or a loss per share of NT$1.0. The company reported NT$22.12 billion in net losses, or a loss per share of NT$3.99, for the whole of last year.

Powerchip shares jumped 6.9 percent to NT$0.62 per share on the over-the-counter market, outperforming the GRETAI Securities Market index’s 0.56 percent rise.

Shares of Rexchip also surged 10 percent to NT$11 on the Emerging Stock Market, a preparatory board for Taiwan’s two main bourses.

Micron’s purchase of the Rexchip shares is part of the US company’s efforts to acquire Elpida in its bid to form a US-Japan-Taiwan alliance to better compete with South Korean rivals in the DRAM industry.

On Monday, Micron announced it had reached an agreement with Elpida’s trustees to acquire the Japanese chipmaker for about ¥200 billion (US$2.5 billion), which is expected to close in the first half of next year. Its purchase of Powerchip’s Rexchip shares will start upon the completion of the Elpida deal, Micron said.

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