Powerchip Semiconductor Corp (力晶半導體), the nation's third-largest maker of computer memory chips, plans to raise US$450 million selling bonds this year to refinance its debt and fund expansion next year.
The company said it plans to sell global depositary receipts and bonds in Europe that are convertible into its stock. With a debt ratio of more than 100 percent and an unaudited NT$1.5 billion net loss last year, Powerchip may find it a tough sell.
"The company will find it hard to place a GDR this year," said Devan Kaloo, who has shares in Powerchip rival Samsung Electronics Co among the US$2.4 billion he helps manage for Aberdeen Asset Asia.
"Investors are scrutinizing companies' capital-raising more closely now, especially in technology," he said.
Powerchip was forced to halve a previous bond sale in December to US$90 million and scale back its expansion plans after its stock fell by half amid a slump in memory-chip prices.
"Several fund-raising activities are being planned in 2003," Powerchip president Brian Shieh (
The company last year became the world's third to open a new chip plant that makes silicon wafers more than twice as large as standard wafers. Powerchip said at the time that it wouldn't need to raise money to fund the US$4.3 billion plant because memory chip prices would improve, allowing the company to return to profit.
Instead, the company posted its second annual loss.
Powerchip said it plans to spend US$500 million this year, of which less than US$100 million would be for production equipment and the rest to pay off debt.
In the first two months this year, Powerchip's sales fell by 16.7 percent to NT$2.1 billion (US$60 million), according to monthly reports filed to the Taiwan Stock Exchange.
The company said last year it expected sales of about US$1.5 billion this year.
"It appears the company's confidence level in terms of generating internal cash flow this year is pretty low," said Chris Hsieh (謝偉民), an analyst with ING Securities Ltd.
Domestic memory-chip makers have high debt ratios, which could make borrowing money from banks difficult, Hsieh said. Banks expect companies with high debt to pay a premium to borrow more money, he said.
Powerchip had a total debt-to-equity ratio of 117 percent at the end of September, according to balance sheet data posted on its Web site, up from 70 percent at the end of 2001 and 18 percent the previous year.
Application-specific integrated circuit designer Faraday Technology Corp (智原) yesterday said that although revenue this quarter would decline 30 percent from last quarter, it retained its full-year forecast of revenue growth of 100 percent. The company attributed the quarterly drop to a slowdown in customers’ production of chips using Faraday’s advanced packaging technology. The company is still confident about its revenue growth this year, given its strong “design-win” — or the projects it won to help customers design their chips, Faraday president Steve Wang (王國雍) told an online earnings conference. “The design-win this year is better than we expected. We believe we will win
Intel Corp chief executive officer Lip-Bu Tan (陳立武) is expected to meet with Taiwanese suppliers next month in conjunction with the opening of the Computex Taipei trade show, supply chain sources said on Monday. The visit, the first for Tan to Taiwan since assuming his new post last month, would be aimed at enhancing Intel’s ties with suppliers in Taiwan as he attempts to help turn around the struggling US chipmaker, the sources said. Tan is to hold a banquet to celebrate Intel’s 40-year presence in Taiwan before Computex opens on May 20 and invite dozens of Taiwanese suppliers to exchange views
Chizuko Kimura has become the first female sushi chef in the world to win a Michelin star, fulfilling a promise she made to her dying husband to continue his legacy. The 54-year-old Japanese chef regained the Michelin star her late husband, Shunei Kimura, won three years ago for their Sushi Shunei restaurant in Paris. For Shunei Kimura, the star was a dream come true. However, the joy was short-lived. He died from cancer just three months later in June 2022. He was 65. The following year, the restaurant in the heart of Montmartre lost its star rating. Chizuko Kimura insisted that the new star is still down
While China’s leaders use their economic and political might to fight US President Donald Trump’s trade war “to the end,” its army of social media soldiers are embarking on a more humorous campaign online. Trump’s tariff blitz has seen Washington and Beijing impose eye-watering duties on imports from the other, fanning a standoff between the economic superpowers that has sparked global recession fears and sent markets into a tailspin. Trump says his policy is a response to years of being “ripped off” by other countries and aims to bring manufacturing to the US, forcing companies to employ US workers. However, China’s online warriors
RSS