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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (54196)	10/16/2001 3:53:30 PM
From: Proud_Infidel	Respond to of 70976

ProMos Technologies Delays Expenditures on 12-In. Fab October 16, 2001 (TAIPEI) -- The continuing low visibility of global dynamic random access memory prospects and the lack of abundant funds has forced OTC-listed ProMos Technologies Inc., a DRAM manufacturing venture between Mosel Vitelic Inc. and Germany-based Infineon Technologies AG, to delay its planned capital expenditures on a 12-inch wafer fab. The fab was forecast to go ahead with first phase mass production of 9,000 pieces monthly in the second quarter of 2002. Due to an underestimation of the depth of the cyclical slump in the DRAM industry, ProMos and other DRAM producer counterparts have continued to inject their limited funds into the construction of 12-inch fabs since earlier this year, counting on a recovery of the subsector in the later half of this year. On this assumption, ProMos has injected nearly US$500 million into the 12-inch fab plant construction, despite a tight cash situation. Its total capital requirement for the plant set-up will be a sum of US$730 million. ProMos has announced cutting it to US$690 million, as the company failed to reach its financial arrangement goals, including the issuing of overseas transformable company bonds for US$150 million and 300 million shares of global depositary receipts for US$270 million. The halt of capital expenditures has inevitably delayed the plant construction schedule, forcing the company to publicly announce the postponement of the production plan. Initially, ProMos planned to begin trial production of the 12-inch fab plant, with a beginning production capacity of 600 pieces of wafers in December, climbing to a monthly 4,000 pieces by the end of the first quarter of 2002. However, the production plan has been halted as a result of the capital expenditure cut. 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. (NT$34.55 = US$1) The company began to construct the plant as early as the second half of 2000, 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. (Commercial Times, Taiwan)