Debt-ridden memorychip maker Powerchip Technology Corp (力晶科技) yesterday said it was in talks with several buyers to sell a 12-inch wafer factory after the company’s total debts surpassed its assets.
The Hsinchu-based company’s liability ratio climbed to 102 percent last month, according to a statement submitted to the Taiwan Stock Exchange, compared with 99.86 percent in July.
The deterioration in its finances brought Powerchip to the brink of delisting from the nation’s over-the-counter GRETAI Securities Market as its net value fell into negative territory, from NT$0.28 per share at the end of last quarter.
Another memorychip maker, ProMOS Technologies Inc (茂德科技), was forced to end its trading on the GRETAI Securities Market in March, with the global DRAM sector suffering from weakening demand and a supply glut.
As of June 30, Powerchip had accumulated NT$54 billion (US$1.82 billion) in losses, the company’s financial statement showed. Debt totaled NT$65.09 billion, while overall assets stood at NT$66.63 billion.
“We are aggressively approaching several buyers. No substantial conclusion has been made,” Powerchip spokesman Eric Tang (譚仲民) said in the statement.
The Chinese-language business daily Economic Daily News reported yesterday, without citing sources, that Powerchip might sell the 12-inch fab to the world’s top contract chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), for NT$10 billion.
In May, Powerchip’s board approved a proposal to sell 6 billion shares, with the company using the proceeds to repay debts, fund equipment purchases and replenish operation capital.
To further boost its finances, Powerchip’s shareholders gave the green light in June to slash capital shares by 60 percent to 2.22 billion shares.
To diversify from the volatile DRAM chip business, Powerchip has allocated 60 percent of its total capacity to make chips, mostly driver ICs for flat panels, on a contract basis. Powerchip said earlier this month that the new business was profitable.
Shares of Powerchip declined 5 percent to NT$0.38. The stock is restricted from margin trading.
By comparison, the GRETAI index closed up 0.88 percent at 106.60 points yesterday.