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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: stox19 who wrote (3271)	9/25/2002 4:02:15 PM
From: Proud_Infidel	Respond to of 25522

Mosel saddled with debts and rumors By Faith Hung EBN (09/25/02 01:03 p.m. EST) HSINCHU, Taiwan --- Mosel Vitelic Inc. may be finding itself squeezed by mounting debts and the persistent industry downturn. Mosel, which has a DRAM joint venture with Infineon Technologies AG called ProMos Technologies Inc., has denied speculation circulating in Taiwan that it won't be able to repay more than $570 million in debts and may be forced to sell its stake in ProMos to help pay loans and corporate bonds. In an unscheduled press conference, Mosel chairman Hu Hung-chiu claimed that the company's debts total only $367 million and are not due until May 2003. “There are no debts due this year for us and we currently have $191 million in cash equivalents,” Hu said. “We don't see any immediate pressure that would force Mosel to sell (ProMos) stocks.” Still, some analysts remain skeptical. “We believe Mosel Vitelic or its creditors will have to sell ProMos shares at whatever price to cash out, should any risk arise about Mosel defaulting on its payments,” according to a research report published this week by Salomon Smith Barney, Taipei. Mosel, a leading DRAM vendor based in Hsinchu, Taiwan, isn't the only DRAM player that's suffering from declining prices and excessive supply. Micron Technology Inc., Boise, Idaho, said yesterday that its after-tax net loss for the fourth quarter was $587 million and for fiscal year 2002 was $907 million. “The future is not clear, because everything is changing so fast,” Via Technologies Inc.'s president and chief executive Chen Wen-chi said in a public appearance in Taipei today. Via is the biggest rival of Intel Corp. in core-logic chipset designs. Looking forward, Taiwan's DRAM companies see more tough times. “We've not heard of any exciting developments that would stimulate demand in the typically strong December quarter,” Hander Chang, an assistant vice president of Winbond Electronics Corp., told EBN in an interview. “It's very difficult to be in the DRAM business now.” Having cut their financial forecasts for the full year of 2002, Taiwan's Mosel, ProMos, Nanya Technology and Powerchip Semiconductor Corp. will probably reduce their targets for a second time this year due to the lack of signs that point to a sustainable recovery, some analysts said. “There's hardly any end-market demand for SDRAM,” said Alfred Yin, research head of BNP Paribas Peregrine Securities Hong Kong. Mosel, which sells DRAMs for ProMos, would be hurt by that since SDRAM accounts for more than 50% output of ProMos, he added. For now, DRAM companies can only rely on DDR (double-data-rate) DRAM, which still brings in profits for manufacturers like Nanya and Winbond. Hsinchu-based Winbond has shifted more than half of its output to DDR DRAM from SDRAM and is planning to further increase its DDR production, Chang said. In the six months to June, Mosel lost $106 million, compared with losses of $254 million in the year-ago period. The company is planning to raise $114 million in October to help pay the debts by selling its stock in a right issue at 29 cents each, a price level which some analysts said would be difficult to attract investors. On the Taiwan stock market today, Mosel shares closed at 20 cents, down by the 7% daily limit from a day earlier.