PSMC to issue GDRs, raise funds for operations

Taipei, Jan. 21 (CNA) Powerchip Semiconductor Manufacturing Corp. (PSMC) is planning to issue global depositary receipts (GDRs) to raise working capital for its operations as it looks to cash in on the overall recovery of the global semiconductor sector.

In a statement given to the Taiwan Stock Exchange (TWSE) on Tuesday, PSMC said it will sell GDRs in a quantity equal to up to 420 million common shares.

That translates to a fund-raising potential of around NT$26.3 billion based on PSMC's closing price of NT$62.60 (US$1.98) in Taiwan on Wednesday.

According to PSMC, which provides foundry services in advanced memory chips and logic ICs, the company will launch a rights issue to issue new shares for the GDR sale.

Under a rights issue, existing shareholders usually get the right to purchase additional shares in the company.

PSMC said it has scheduled a general meeting for April 10 to discuss the common share issuance and the GDR deal as well as a reshuffle of its board of directors.

In addition to boosting its working capital, PSMC said it will also use the proceeds of the GDR sale to repay bank loans and meet fund demand for future growth.

The GDR issuance deal is the second move by PSMC to raise funds in just days after it announced Saturday that it signed an exclusive letter of intent (LOI) with U.S.-based DRAM maker Micron Technology, Inc. to sell its P5 fab in Tongluo in Miaoli County for US$1.8 billion.

PSMC said the transaction is expected to be completed in the second quarter of this year.

Under the LOI, Micron will set up a long-term foundry relationship with PSMC on advanced DRAM packaging wafer manufacturing, while the U.S. company will help PSMC strengthen its specialty DRAM processes.

In a separate statement, PSMC said that after the sale of the Tongluo plant, it will strengthen its financial structure and ride the semiconductor recovery to "integrate advanced packaging technologies and materials such as 3D wafer-on-wafer (WoW) and interposers to become a key player within the AI supply chain."

PSMC Chairman Frank Huang (黃崇仁) said his company will reorganize its production resources, referring to its three 12-inch and two 8-inch wafer fabs, to tackle the AI supply chain.

Huang said PSMC will focus on value-added wafer foundry products for AI applications such as 3D AI DRAMs, WOW, silicon interposers and integrated passive devices (IPD), power management ICs, and power components.