Mosel-Vitelic to Raise Capital for Photovoltaic Deployment

Taipei, May 13, 2008 (CENS)--Director board of chipmaker Mosel-Vitelic Inc. recently passed a motion to issue 228 million units of Global Depository Receipt (GDP) to raise capital for expansion in photovoltaic field.

The amount of the capital to be raised is estimated at NT$6.3 billion (US$210 million at US$1:NT$30) given an average NT$27 of the company's share price in recent weeks.

Industry watchers pointed out that burgeoning solar-energy market has inspired the insiders to launch bold expansions. Since early this year many Taiwanese photovoltaic manufacturers have announced aggressive capital-raising plans, with Gintech Energy Corp. scheming to raise around NT$10 billion (US$333 million) through syndicated loans and capital increasing, as well as Moteck Industries Inc. and Neo Solar Power Corp. mulling to raise capital through syndicated loans and capital increasing.

Mosel-Vitelic executives said the capital the company was planning to collect would be set aside as fund for photovoltaic materials and production equipment. This is a significant capital-raising proposal after Mosel-Vitelic left DRAM manufacturing for solar-energy manufacturing.

Mosel-Vitelic is facilitating its solar-energy program, scheduled to break ground on the site of its second photovoltaic factory today. The company plans to double its solar-cell output to 60 megawatts some time this quarter. As soon as the second factory is completed in the fourth quarter this year, the company will gain an additional output of 100 megawatts in the initial stage and 200 megawatts in the long run.

The company is running a 30-megawatt production line, which is funneling around NT$200 million (US$6.6 million) into its revenue every month.

While Mosel-Vitelic is boosting solar-cell output, it is also aggressively securing sources of raw materials for its products. The company has singed a five-year, US$290 million contract to buy silicon wafers from Nexolon of South Korea beginning February this year.

Mosel-Vitelic is counting on silicon foundry and solar cell as revenue sources. Due to over NT$8 billion (US$266 million) loss from investment in DRAM chipmaker ProMOS Technologies, the company reported after-tax net loss of NT$1.2 billion (US$40 million) in the first quarter. Its revenue for the first quarter contracted 11.8% from a quarter earlier to NT$1 billion (US$36 million) mostly thanks to normally lukewarm foundry market in first quarter.

In April, the company had revenue of NT^$338 million (US$11 million), recessing 17.35% relative to a month earlier. Industry watchers expected a boosted solar-cell output to send the company's revenue rising.