Report: Powerchip upbeat on future despite weak 1Q

April 24, 2007 – Powerchip Semiconductor Corp.’s 1Q07 earnings were its lowest since last summer, due to oversupplies and 60% price declines, but Taiwan’s biggest memory chipmaker thinks the falling prices are spurring demand that will resurge later in the year, notes the Taipei Times.

The company’s net income was about $227 million, with earnings up more than sixfold year-year, but the company is struggling through a “trough” right now, with April seen as the bottom, according to Powerchip president Brian Hsieh. He projects the company’s 2Q profits will be about breakeven while other DRAM firms struggle to turn a profit, and is banking on Vista to drive demand in 2H07 and into 2008 — justifying continued aggressive capacity expansion plans.

Powerchip sees shipments increasing 13% in 2Q, with output for the year surging 82% vs. a year ago (including data from Rexchip Electronics Corp., its massive DRAM JV with Elpida), the paper noted. Rexchip is slated to begin production starting in 3Q with 30,000 wafers/month output, with a second factory beginning construction by the end of 3Q.


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