Nanya Technology Corp (南亞科技), the nation’s biggest PC DRAM maker, yesterday said it had trimmed chip production by between 10 percent and 20 percent since September from its full capacity of 120,000 wafers a month in a move to shore up prices.
Nanya said it would continue to adjust factory utilization to cope with market demand through weekly reviews.
“The price will remain weak because inventories are still two weeks higher than the normal levels,” Nanya spokesman Pai Pei-lin (白培霖) said by the telephone.
Floods in Thailand have aggravated the lengthy oversupply since demand could decrease further because shipments of some PC companies were stalled after the supply of hard disk drives became constrained, Pai said.
Commenting on the price trend, Pai said DRAM prices would seesaw over a narrow range this month and next month because prices have fallen to approach the cost level of most companies.
A free-fall in chip prices has driven Nanya Technology into deep losses totaling NT$28.89 billion (US$956 million) in the first nine months of this year.
To improve the company’s financial structure and to replenish its operating capital, the firm yesterday received the approval from its shareholders to raise funds by issuing 15 billion new common shares at a price of NT$2.77 a share via private placement. Parent company Formosa Plastics Group (台塑集團) is likely to subscribe to Nanya shares as it did before.
Shares in Nanya Technology tumbled 6.37 percent to NT$2.5, while Powerchip Technology Corp (力晶科技) shares rallied for the seventh day of trading to NT$1.49 as it was gradually shifting away from the volatitle DRAM industry.
Minister of Economic Affairs Shih Yen-shiang (施顏祥) said the government had taken steps to assist DRAM firms, which have been battered by a down cycle and plummeting prices. However, Shih did not elaborate on the government’s response to Powerchip’s reported application to roll over its debt for one more year.
"The Industrial Development Bureau is handling the matter," he said.
In the first nine months of this year, Powerchip posted a net loss of NT$13.26 billion, compared with NT$12.21 billion in net profit a year earlier.
With its syndicated loans scheduled to mature in the middle of next month, Powerchip hopes that its creditor banks, mostly government-invested, will roll over the loans for one more year.
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