Tue, Jan 22, 2013 - Page 14 News List

Elite, Zentel intending to buy Powerchip’s facilities

BOOST CAPACITY:Several chipmaking companies are interested in purchasing wafer production facilities from Powerchip Technology to meet growing demand

By Kevin Chen  /  Staff reporter

Local chip designers Elite Semiconductor Memory Technology Inc (晶豪科技) and Zentel Electronics Corp (力積電子) yesterday said they planned to buy wafer production facilities from loss-making Powerchip Technology Corp (力晶科技).

Elite Semiconductor and Zentel Electronics are among several local chipmakers and integrated circuit (IC) designers, who include Vanguard International Semiconductor Corp (VISC, 世界先進) and Etron Technology Inc (鈺創), that have recently expressed interest in acquiring Powerchip’s production facilities to boost capacity to meet growing customer demand.

Elite Semiconductor, located in Hsinchu Science Park (新竹科學園區), said in a filing to the Taiwan Stock Exchange after the local stock market closed that it had signed a memorandum of understanding (MOU) with Powerchip to purchase some production equipment from the latter’s 12-inch wafer fab, named P3.


Under the MOU, Elite Semiconductor said Powerchip also agreed to produce memory-related products for it on a contract-making basis, according to the filing.

“Elite Semiconductor plans to place the newly acquired production equipment within the P3 factory and make Powerchip a manufacturing partner to the company,” Elite spokesman Wu Hung-chi (吳鴻基) said in the filing. “The purpose of the deal is to ensure sufficient supply for the company’s wafer capacity.”

Elite Semiconductor supplies various memory ICs. Rather than the commodity DRAM used for PCs, servers and workstations, the company’s DRAM products focus on specialty DRAM memory used in PC peripherals, IA products, consumer products, optical devices and communication devices.


Meanwhile, Zentel Electronics said in a separate filing to the stock exchange that its board of directors yesterday also approved a management proposal to purchase Powerchip’s 12-inch wafer fab to meet its future wafer capacity demand.

“The company has authorized the appointed company representative to sign the purchase agreement [with Powerchip],” Zentel vice president Robert Chang (張榮輝) said in the filing.

In late November last year, Vanguard Semiconductor said its board had agreed to give the chairman the authority to assess potential asset purchases, although it did not elaborate on what assets it was considering acquiring and from who.

Powerchip has gradually shifted its focus to the contract chipmaking business from PC DRAM chips.

The debt-ridden memorychip maker has hired Singapore-based Equvo Pte Co to help it auction the 12-inch fab in Hsinchu. It plans to use the proceeds to repay debts and strengthen its working capital.

Yesterday was the deadline set for the sale and Equvo is expected to decide on the winning bids and notify the successful bidders by the end of this month, Powerchip said last month.

Powerchip lost NT$13.17 billion (US$455 milion) in the first three quarters of last year after accumulating losses of NT$54.4 billion over the past several years.

Additional reporting by Lisa Wang

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top