ChipMOS Technologies Inc (南茂科技), a Hsinchu-based chip packaging and testing services provider, on Wednesday said it had secured syndicated loans totaling NT$10 billion (US$334 million) from a group of local banks.
The funds come as the company as the firm shifts its focus away from the packaging and testing services of commodity DRAM to niche memory and LCD driver chips, which generate a higher gross margin, after debt problems with memorychip clients.
In the first quarter, the firm’s revenue contribution from memory packaging and testing businesses dropped below 50 percent, although it remains a major sales driver.
ChipMOS reported NT$883 million in net profit in the first quarter on revenue of NT$4.99 billion. Earnings per share were NT$1.02 in the first quarter, up from NT$0.84 in the previous quarter and NT$0.51 a year earlier, company data showed.
Analysts have expected the company to continue benefiting from growing demand for LCD driver IC chips, driven by higher-resolution smartphones and 4K2K TVs, as well as outsourcing from Samsung Electronics Co.
ChipMOS said in a statement that it would use the new funds to refinance its existing debt obligations, strengthen its working capital and for general corporate purposes.
The five-year syndicated loans with floating rates — composed of a NT$6 billion secured loan and a NT$4 billion unsecured credit line — were provided by 11 domestic banks led by the Bank of Taiwan (BOT, 台灣銀行).
The state-run bank said in a statement that the syndicated loans were oversubscribed by 42 percent — to NT$14.2 billion — as lenders were bullish on the growth potential of the Hsinchu Science Park-based company.
“The company’s strong financial health, differentiated market position and continued growth opportunities were all strong factors that combined to bring us this latest opportunity,” ChipMOS chairman and CEO Cheng Shih-chieh (鄭世杰) said of the syndicated loans in the statement.
ChipMOS shares rose 0.35 percent to NT$42.95 yesterday in Taipei trading, rising 51.66 percent since its debut on the main bourse on April 11.