Elpida Memory Inc, Japan’s largest maker of computer memory chips, yesterday said it planned to raise about NT$3.7 billion (US$120 million) by issuing Taiwan depositary receipts (TDR) to fund its next-generation technology development to bring down production costs.
The offering would make Elpida the first Japanese company to list on the Taiwanese stock market through a TDR issue, as the Tokyo-based chipmaker builds on its close partnership with Taiwanese DRAM makers to counter competition from South Korean memory giant Samsung Electronics Co.
Elpida is the world’s third-biggest memory chipmaker after Samsung and Micron Technology Inc of the US.
PHOTO: NICKY LOH, REUTERS
The company said in a press release on its Web site that it hoped to sell up to 10 million common shares, or 200 million TDRs, in the current fiscal year, which ends on March 31 next year. One TDR would represent 0.05 Elpida common share.
The chipmaker said the Taiwanese listing would assist the company “to increase opportunities to expand its business in Taiwan,” according to the press release.
Elpida added that it expected the listing to lead to “an increase in the company’s business opportunities from the perspectives of further intensifying the alliances with the Taiwanese DRAM manufacturers.”
Taiwanese chipmakers Powerchip Technology Corp (力晶科技), ProMOS Technologies Inc (茂德科技) and Winbond Electronics Corp (華邦電) are Elpida’s major partners. While Elpida provides new generation technologies, these companies in turn provide it with vital production capacity.
As DRAM prices continue to trend down, Elpida has also announced plans to scale back production to support prices, after Powerchip and ProMOS made similar moves.
Elpida’s announcement of the TDR offering came after its board approved the plan earlier yesterday.
Last month, Elpida president Yukio Sakamoto told Bloomberg Newswires in an interview that the company planned to list its shares on the Taiwan Stock Exchange (TWSE, 台灣證交所) early next year.
According to the Web site press release, the company has hired KGI Securities Co (凱基證券) as the lead underwriter to manage the TDR sale. Elpida has sent the application to TWSE, the exchange said yesterday. The issuance will be subject to approval by Taiwanese financial regulators, including the TWSE and the Financial Supervisory Commission.
So far this year, 23 overseas companies have raised US$1.6 billion by listing their shares on the local stock market, according to TWSE statistics.
Since the Taiwanese government relaxed rules to facilitate share sales by overseas companies in 2008, 20 foreign companies have traded their TDRs on the local bourse, the TWSE said in a statement on Wednesday.
China’s integrated IT service provider Digital China Holdings Ltd (神州數碼) is the latest, offering the biggest TDR sale to date.
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