Powerchip sells shares in Rexchip to Micron, pockets NT$9.7 billion

Powerchip sells shares in Rexchip to Micron, pockets NT$9.7 billion

Powerchip Technology, a local dynamic random access memory (DRAM) chip-maker, yesterday sold its stake in subsidiary Rexchip to Micron, pocketing a gain of about NT$9.7 billion, it said yesterday.

subsidiary [sub·sid·i·ar·y || səb'sɪdɪerɪ /-dʒərɪ]
n. 子公司, 輔助者, 附加物
adj. 輔助的, 附帶的; 隸屬的, 附設的; 次要的;

Back in May, Micron, the biggest memory chip-maker in the United States, received Japanese court approval to purchase Elpida, which had posted losses for five straight quarters and filed for bankruptcy in February.

bankruptcy ['bank·rupt·cy || 'bæŋkrəptsɪ]
n. 破產, 倒閉; 完全喪失; 徹底失敗

Shortly after the deal was completed, Powerchip Vice President Tan Chung-min said the company would get rid of its stake in Rexchip, a joint venture between the company and Elpida, and its P3 fabrication facility. The statement prompted the market to speculate that Powerchip's withdrawal from the DRAM industry would just be a matter of time.

Rexchip President Chen Cheng-kun, meanwhile, had also said his company may be merged into Micron and become a 100 percent subsidiary. If that's the case Rexchip will become a foreign company, he said.

Powerchip yesterday announced plans to get rid of its holding of some 628 million Rexchip shares at NT$14.03 a share, translating into a total of NT$8.86 billion. Separately, Powerchip also sold 63.46 million worth of Rexchip shares on the behalf of subsidiary Li Shin Investment, translating into a sum of NT$890.38 million. The two added up to some NT$9.7 billion.

Micron also confirmed the transaction yesterday, saying through an email statement that the company has the right to purchase Powerchip's holdings in Rexchip.

With Micron's acquisition of Elpida and Rexchip holdings formerly held by Powerchip, the U.S. memory giant's market share is expected to expand further, experts said.

Powerchip's sale of Rexchip shares represented the latest example of Taiwan memory makers' move to leave the DRAM sector, which has become growingly fierce and competitive.

"Taiwan's DRAM industry has lost during this wave of elimination battle," Rexchip's Chen said. "DRAM is unable to take roots in Taiwan."