Mosel Vitelic Inc (茂矽), parent of the nation's second-largest memory-chip manufacturer ProMOS Technologies Inc (茂德科技), managed to reduce a predicted 2003 loss of NT$8.3 billion by 45 percent to just NT$4.6 billion, the company told the TAIEX in a statement yesterday morning.
But the better-than-expected result does not mean that cash-strapped Mosel is out of the woods yet, as much of the improvement may have come from selling off assets in its core dynamic random access memory (DRAM) chip manufacturing business, analysts said.
"The reason that Mosel has revised its earnings/loss is that it sold its DRAM operating assets to ProMOS just before Christmas," said Alfred Ying (應宗傑), an analyst at BNP Paribas in Taipei. "Because of this Mosel booked a big profit."
Mosel's shares rose NT$0.13, or 6.1 percent, to close at NT$2.28 on the TAIEX following the announcement.
On Christmas Eve, Mosel spokeswoman Peng Chuo-lan (彭卓蘭) said the company planned to sell its DRAM business -- including 100 percent of US subsidiary United Memories Inc and 50 percent of Mosel Vitelic (US) Corp -- to ProMOS for US$120 million.
Before the sale of its DRAM assets, Mosel had seen a surge in DRAM sales, reporting memory chip revenue of NT$4.6 billion in October and November -- more than double the same two-month period a year earlier. Mosel is also selling more chips on behalf of ProMOS after its former partner, Germany's Infineon Technologies AG, pulled out of the joint venture last year over a dispute about who would control the chipmaker.
But with no manufacturing base, Mosel has lost its major revenue generator.
"Starting from the sale of its DRAM assets to ProMOS, Mosel's sales will not include DRAM chips and will therefore see a rapid decline," Ying said. "I'm still not very positive about Mosel's future. Its only option is to sell shares in ProMOS."
Another analyst was slightly more optimistic for the company's prospects this year, saying that its shares in ProMOS would ensure its survival.
"Mosel's problems are gradually being eased as it still has a lot of shares in ProMOS which they can continue to liquidate to create cash to repay its debts," said James Huang, (
Only last Friday, Mosel applied to sell 200 million shares in ProMOS to raise money to pay off its remaining debt. Mosel aims to hold just over 600 million shares in ProMOS after the sale, the statement said.
In the spring and summer of last year, Mosel had to apply to creditors to restructure almost NT$6 billion in overdue debt that it could not repay.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to