October 16, 2001 – Taipei, Taiwan – The continuing low visibility of global DRAM prospects and the lack of abundant funds has forced ProMos Technologies, a DRAM manufacturing venture between Mosel Vitelic Inc. and Germany-based Infineon Technologies AG, to delay its planned capital expenditures on a 300mm wafer fab.
The fab was forecast to go ahead with first phase mass production of 9,000 pieces/month in 2Q02.
Its total capital requirement for the plant set-up will be a sum of $730 million. ProMos has announced cutting it to $690 million, as the company failed to reach its financial arrangement goals, including the issuing of overseas transformable company bonds for $150 million and 300 million shares of global depositary receipts for $270 million.
The company’s financial department revealed that it holds a cash position of NT$12 billion at present, some of which has been earmarked to repay a NT$3 billion long-term debt that will mature shortly. In addition, the company intends to spend as much as NT$5.5 billion on semiconductor equipment, leaving it with little cash for other purposes.
Since the failure of the fund-raising plan, the financial department of the company confirmed that it will cover the shortfall of its cash injection by raising bank lending to NT$8 billion from NT$4 billion. Nevertheless, the disappointing business performance, the dismal prospects of the DRAM sector and the weak shares value will make it difficult for the company to persuade banks to lend it more.
The company began to construct the plant as in 2H00, and related processing equipment was set to be installed in the plant in the first quarter of this year. But the plan has been delayed due to the fund squeeze.