Taiwan Acer says chip-making unit recovering
By James Peng
TAIPEI, April 12 (Reuters) - Acer Inc's microchip unit, running at full steam and easing its dependence on the cut- throat memory-chip market, said on Monday it expects to make a profit for 1999 despite a first-quarter loss.
Chairman Stan Shih said Acer Semiconductor Manufacturing turned an unspecified profit in March and was on track to meet its full-year profit target of T$1 billion (US$30.2 million).
''After 33 consecutive months of losses, we finally saw a turnaround in March,'' Shih said at a news briefing. ''This is a significant improvement and we should be able to reach our T$1 billion profit target for this year.''
Shih said Acer Semicon's nascent recovery enabled Acer Inc to set a 1999 sales target of T$120 billion (US$3.6 billion), up from T$98 billion in 1998. He gave no profit forecast. Acer netted T$2.492 billion in 1998 -- down 33 percent from 1997.
Acer Semiconductor fared poorly in 1998, losing over T$5 billion as prices for dynamic random-access memory chips, its main product, had yet to stabilise after years of free fall, executives have said.
Shih painted a picture of a once-troubled chip operation undergoing a successful transformation, with utilisation rates at its wafer-fabrication units running at 100 percent.
Monthly output would reach 35,000 eight-inch equivalents in the second half from the current 26,000-27,000 rate, he said.
He said Acer Semicon was successfully diversifying from a near-total reliance on manufacturing of dynamic random-access memory chips, or DRAM, a high-tech commodity, into the technically demanding but lucrative market for made-to-order logic or ''foundry'' chips -- a Taiwan specialty.
Shih said DRAM production now was only 80 percent of Acer Semicon's total, with logic chips making up 20 percent.
DRAM remains a central focus, however, with Acer investing heavily in advanced production technology that would push Acer to the 0.22-micron level in the third quarter and 0.2 microns in the fourth, compared to 0.28-micron technology today.
Acer already makes logic chips at the 0.25- and 0.22-micron level and would reach 0.18 microns in 2000, he said.
Acer Semiconductor -- called TI-Acer until Acer bought out partner Texas Instruments' (NYSE:TXN - news) stake a year ago -- is producing industry benchmark 64-megabit DRAM at a rate of four million chips a month, Shih said.
Shih said Acer Semiconductor would lay out US$200 million for capital expenditure in 1999, the same as it spent in 1998, focusing on upgrading capacity and production technology.
Acer Semicon chief financial officer Lora Ho said the chip-making unit aimed to list shares in the Taiwan stock market in the fourth quarter of 2000.
Acer will launch a T$8-10 billion rights issue in the third quarter of 1999 to raise funds to redeem T$5.2 billion in earlier special shares, she said. Acer Semiconductor recently completed syndicated loans of T$4 billion and US$71 million to repay old loans, Ho said.
Ho confirmed that Acer Semicon was spinning off an outdated six-inch wafer fab to Episil Technologies, saying Episil would buy the equipment and rent the facility. Acer Semiconductor will take a 10-15 percent stake in Episil's venture.
Ho declined to say what the Episil purchase was worth, but said Acer did not make or lose money on the deal. She said Acer had invested US$450 million in the six-inch wafer fab and that production equipment represented 80 percent of its value.
(US$ equals T$33)
|
