PC memory chipmaker Inotera Memories Inc’s (華亞科技) parent company, Formosa Group (台塑集團), will subscribe to its latest sale of 640 million new shares, a company executive said yesterday.
The Taoyuan-based Inotera is a joint venture of Nanya Technology Corp (南亞科技), the nation’s largest maker of PC memory chips, or dynamic random access memory (DRAM), and US memory chipmaker Micron Technology Inc.
The new share sale will help the chipmaker raise NT$14.4 billion (US$449.2 million), which Inotera plans to spend on buying new equipment for a technological upgrade. Each share was priced at NT$22.50, the company said in a filing to the Taiwan Stock Exchange earlier this month.
The fundraising plan, which aims to expand capacity, comes as the DRAM industry is recovering from a slump because of oversupply and low demand amid a global economic recession that curtailed PC sales and other electronic devices since late 2008.
“Our major shareholder will support [the fundraising project],” Inotera president Charles Kau (高啟全) said during a luncheon with reporters.
Formosa Group holds a more than 30 percent stake in Inotera primarily through its subsidiary Nanya Technology, which owns the group’s Nanya Plastics Corp (南亞塑膠) and Formosa Taffeta Co (福懋興業).
Investors are expected to make the payment next week, the company said.
Inotera also intends to arrange NT$25 billion in syndicated loans in the first half of this year to fund the purchase of equipment.
This year, Inotera hopes to quadruple its capital spending to NT$52 billion to help it migrate to cost-efficient 50-nanometer and 40-nanometer technologies. Last year, the company spent NT$13.2 billion.
Capital spending could help the company expand production by between 80 percent and 90 percent this year from last year, Inotera said
In contrast with the severe oversupply that plagued chipmakers in recent years years, Kau said the DRAM industry looked stable this year, with no company expected to build a new plant.
On the demand side, Kau said last week that “we are seeing real replacement from corporations for their old PCs and servers.”
PC upgrades, which are expected to take between two and three years to complete, could boost DRAM demand by between 35 percent and 40 percent annually, he said.
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