Powerchip Technology Corp (力晶科技), the nation’s biggest computer memory chipmaker, yesterday said it would seek a rollover of NT$40 billion (US$1.3 billion) in bank loans as the company aims to keep more operating capital amid a recent slump in chip prices.
BIG INVESTMENTS
Powerchip has also budgeted big investments on new equipment to facilitate its migration to cost-efficient 40 nanometer process technology, which would be crucial for the company to cut manufacturing costs, company spokesman Eric Tang (譚仲民) said on the telephone.
“Chip prices are falling at a faster pace than we expected,” Tang said. “We want to have more capital at hand and we have to pay for new equipment, which is expensive.”
The price of computer memory chips, or dynamic random access memory (DRAM), is expected to plunge more than 30 percent this quarter from last quarter on weak recovery of PC sales after a 17 percent quarterly decline in the July-to-September period, TrendForce Technology Corp (集邦科技) forecast.
TrendForce expects chip prices to hit the bottom at the end of next quarter at the earliest.
Powerchip is seeking a one-year grace period on the NT$40 billion loans, Tang said. The chipmaker hoped creditors would agree with its proposal to extend the payment for principals of the loans by 12 months, he said.
UPGRADES
Powerchip plans to spend NT$16 billion on new equipment for technological upgrades during the period ending in the first half of next year.
On Monday, the chipmaker withdrew the planned issuance of 800 million common shares via global depositary receipts, which could have helped Powerchip raise up to US$179 million, as weak chip prices hurt its stock price.
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