Powerchip, Nanya say they're not in any merger talks

Powerchip Semiconductor Corp (力晶半導體) and Nanya Technol-ogy Corp (南亞科技), two unprofitable memory-chipmakers, said they aren't involved in the merger talks sweeping the industry, betting they can survive the worst slump in chip demand.

"We've had no such discussions," said Powerchip president Michael Tsai (蔡國智) said in an interview.

"No way," said Charles Kau (高啟全), said Nanya executive vice president, in an e-mail to Bloomberg News.

Powerchip plans to borrow NT$8 billion (US$232 million) to buy equipment for its latest plant, which should help cut costs by a third, Tsai said. Nanya has a similar plan, according to Kau.

Tsai said he expects Infineon Technologies AG to merge with ProMOS Technologies Inc (茂德科技), a venture of Europe's second-largest chipmaker and Taiwan's Mosel Vitelic Inc (茂矽電子). Mosel this month said it held talks with Infineon and others in Taiwan about merging.

Powerchip, which sells most of its output to Mitsubishi Electric Corp of Japan, has been "working well" with its partner, Tsai said. He denied a report that cited him as saying Taiwan should have a single supplier of standard chips rather than five.

"To say there should be only one memory-chip maker in Taiwan is too bold," Tsai said, adding trade journal EE Times misquoted him in an interview.

Nanya Technology, the only Taiwanese memory-chip maker whose shares have recovered from a plunge that followed the Sept. 11 attacks, will survive, Tsai said. Nanya said this week a new high-speed chip is helping boost sales.

Powerchip turned to a loss of NT$4 billion (US$116 million) in the three months to Sept. 30, compared with a profit of NT$2.5 billion a year earlier. Third-quarter sales tumbled to NT$1.7 billion from NT$6.8 billion a year ago.

Taiwan's memory-chip makers posted third-quarter losses that totaled NT$20 billion. Mosel's NT$6.2 billion loss in the period was the largest of the five Taiwan companies.