Macronix considers quitting NASDAQ

BATTLING IT OUT: Company chairman Miin Wu is leading a team of employees against Frank Huang's Powerchip in a struggle for operational control


Thu, May 24, 2007 - Page 12

Taiwanese memory chipmaker Macronix International Co (旺宏) is considering withdrawing its listing from the NASDAQ stock market to cut costs, a company executive said yesterday.

A team led by Macronix chairman Miin Wu (吳敏求) is battling for control of the company against its largest shareholder, Powerchip Semiconductor Corp (力晶半導體).

Powerchip, led by Frank Huang (黃崇仁), is the nation's top computer memory chip maker. Powerchip now owns a 5.43-percent stake in Macronix after starting buying Macronix shares beginning in late 2005.

Macronix makes flash memory chips that are primarily used in game consoles such as those made by Japan's Nintendo Co.

"We have had preliminary discussions about having Macronix delisted from NASDAQ," company spokesman Lin Yun-lung (林雲龍) told the Taipei Times.

The Hsinchu-based chipmaker would save about NT$100 million (US$2.99 million) each year if Macronix stopped trading American depositary receipts in the US, Lin said.

"No timetable has been set for the delisting yet," Lin said.

In 1996, Macronix became one of the first local companies to trade shares on NASDAQ.

The Wu-led management team's biggest goals are winning operational control of the company and securing more than half of the seats on the 15-member board during the election scheduled for June 29, Lin said.

If the team failed to reach these goals, Wu would likely resign his post, Lin said.

Macronix published a half-page advertisement in major newspapers on Tuesday to seek support from individual shareholders.

Powerchip has also said it wants to control the chipmaker's board and that it wants Macronix to diversify production away from the computer memory business.

"We believe Powerchip aims to obtain flash memory manufacturing technologies by buying into Macronix, which will give Powerchip more leverage in talks with foreign companies regarding technology transfer," said Liu Szu-liang (劉思良), a semiconductor industry analyst with Yuanta Core Pacific Capital Management (元大京華投顧).

Instead of paying pricey royalties to make flash memory chips, Powerchip would gain a bargain by obtaining Macronix's patents by acquiring a controlling share in the company, Liu said.

Powerchip, which does not have representatives on Macronix's board now, said on Monday that it would make eight nominations for the board.

"As the biggest shareholder of Macronix, Powerchip hopes to take part in the company's operations to boost its business," said Michael Tsai (蔡國智), a Powerchip vice chairman.

Last year, Powerchip bought a vacant chip plant from Macronix for NT$5.3 billion. Powerchip now makes computer memory chips and flash memory chips at the plant.