ProMOS Moves to Apply for Official Financial Bailout

Taipei, Dec. 11, 2008 (CENS)--With its financial structure continuing to be shaken, ProMOS Technologies Inc., a Taiwanese DRAM maker, is applying for bailout with the government. The move, already confirmed by officials at the Ministry of Economic Affairs, will force ProMOS to terminate cooperation with Hynix of Korea and turn to Elpida of Japan, according to industry sources.

According to reports by DRAMeXchange, the spot price of DDR2 1Gb eTT memory has hit the bottom line at US$0.6 per unit (closed on Dec. 9), further deteriorating the industry of DRAM. To save its financial health, ProMOS recently decided to dispose of some 100 units of 12-inch wafer testing machines and a part stakes in its reinvested companies for cash.

ProMOS chairman Chen Min-liang said his company's management is trying to find ways to keep developing ProMOS and Taiwanese DRAM industry, seriously considering governmental suggestions with an open mind.

ProMOS's financial structure is rocky as its third-quarter financial report shows an estimated NT$16.6 billion in AP (accounts payable) currently and a total of NT$11.1 billion in CB (convertible bond) and NT$1.3 billion in long-term loans coming due early next year. Suffering a deficit of NT$10 billion in cash at the end of the quarter, the firm hence decided to dispose of assets and seek bailouts.

Nevertheless, industry insiders are critical of the government's terms of asking DRAM maker applicants to work with Delpida, indicating a demand for these applicants to start developing own technologies instead of merely offering financial aid, which makes sense as all Taiwanese DRAM makers have heavily relied on costly technical exchanges to produce DRAMs.