The Formosa Plastics Group, the parent company of Taiwan's DRAM chipmaker Nanya Technology, will subscribe to new Nanya shares through a private placement, according to company sources.

Nanya last Friday said it will initiate a capital expansion plan in the second half of this year. Under the plan, the DRAM chipmaker will raise capital through a private placement and a rights issue, with neither of them exceeding four billion shares. The company said the funds are to be used to complete its process migration.

Prior to raising its capital, Nanya will cut its capital by 66.43% to NT$15.76 billion to strengthen its financial structure. The measure will help increase the money-losing DRAM maker's net asset value, market observers indicated. Nanya is expected to raise its net value per share to over NT$10, compared to less than NT$5 estimated at the end of the first quarter.

Nanya is looking to migrate to Micron Technology's 68nm stack technology, and to enter 50nm-class production by the end of the third quarter, company spokesperson Pei-Lin Pai said.

Nanya's technology migration will help lower its cost structure, and become more competitive among Taiwan's DRAM chip suppliers, the observers said, adding the company will manage to cut the cost for DDR2 1Gb chips to US$1, after completing its technology migration by tehend of the year.

Nanya and its technology partner, Micron of the US, have decided to enhance their tie-up without joining the Taiwan Memory Company (TMC) to be set up by the government. The Micron-Nanya camp, along with their joint venture Inotera, has committed to building an IP base for Taiwan's DRAM industry

By: DocMemory
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