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Elpida to Acquire a Major Portion of Powerchip Semiconductor Corporation (PSC)

Discussion in 'News' started by malware, Nov 28, 2008.

  1. malware New Member

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    Elpida Memory, Japan's leading global supplier of Dynamic Random Access Memory (DRAM), today announced that its Board of Directors has decided to acquire a portion of the shares its strategic partner Powerchip Semiconductor Corporation (PSC) owns in Rexchip Electronics Corporation (Rexchip), a Taiwan-based manufacturing joint venture created by PSC and Elpida. Details of the share acquisition appear below.

    Share acquisition background
    The prolonged slump in DRAM market prices is currently helping to clarify which DRAM makers will remain as going business concerns. This situation is serving to place Elpida in a relatively more advantageous position in the industry. Given this environment, Elpida has decided to increase its stake in Rexchip above its current 48.8% holding for the purpose of adjusting capacity allocation in order to achieve better supply-demand balances in the DRAM spot market and in the market for DRAMs supplied to major PC makers. While Elpida has the utmost respect for PSC as a partner in the Rexchip joint venture it believes Rexchip can achieve faster business decision-making capabilities by becoming an Elpida subsidiary.

    Changes in significant subsidiaries
    Elpida plans to acquire a 52.0% stake in Rexchip by purchasing a portion of the Rexchip shares held by PSC by the end of FY 2008 (March 2009). The acquisition will result in Rexchip becoming a consolidated subsidiary of Elpida.

    Overview of the planned subsidiary
    Corporate Name: Rexchip Electronics Corporation
    Chairman: Frank Huang
    Head quarters: HouLi, Taichung County, Taiwan
    Established: November 10, 2006
    Major operations: DRAM wafer processing
    Fiscal year ending: December 31
    Number of employees: 2,067 (as of September 30, 2008)
    Office: Head quarters

    Schedule for the acquisition
    During March 2009

    Future outlook
    Based on this share acquisition, Elpida plans to make Rexchip a consolidated subsidiary. The effect of the acquisition on Elpida's FY 2008 earnings performance is expected to be minimal.

    Overview of PSC (the company selling shares to Elpida)
    Corporate Name: Powerchip Semiconductor Corporation
    Chairman: Frank Huang
    Head office: Hsinchu, Taiwan
    Major operations: Manufacturing of and foundry services for semiconductor products

    Number and value of shares acquired
    Number of shares acquired: 94,251 thousands shares (3.2% to number of shares issued and outstanding)
    Value of shares acquired: TBD

    Shareholding ratios before and after transaction
    Shares held before transfer: 1,426,801 thousands shares (Shareholding ratio: 48.8%)
    Shares held after transfer: 1,521,052 thousands shares (Shareholding ratio: 52.0%)

    Source: Elpida
     
  2. WarEagleAU

    WarEagleAU Bird of Prey

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    I think there may be a need for more of these mergers/acquisitions to be going on. With the DRAM market as it is, we need to keep some stable Manufacturers in the marker.
     

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