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Rexchip says it will revamp sales model


Wednesday, February 29, 2012

Rexchip Electronics, the Taiwan-based production subsidiary of Japan's Elpida Memory, has stated that the firm will pursue a new sales model with the parent company, which has filed for bankruptcy protection, and then adjust its production utilization accordingly.

Rexchip does not intend to lower its utilization rate unless it is determined that the output for Elpida cannot be sold, said Lawrence Chueh, finance and accounting director at Rexchip. But in order to minimize the impact of the parent company's insolvency proceedings, Rexchip will accept cash-on-delivery orders only, Chueh added.

Rexchip runs one 12-inch fab with monthly output arriving at 65,000 wafers. The firm started shipping all of its output to Elpida in August as Powerchip Technology - Rexchip's second-largest shareholder - moved to scale down its DRAM operation.

Elpida's business operation has so far remained normal, despite the fact that the company is facing an immediate debt crisis, Chueh pointed out. Elpida on February 27 filed for bankruptcy in order to restructure its business debts.

Rexchip has about NT$4 billion (US$136 million) in accounts receivable from Elpida, Chueh said. Chueh also disclosed his company currently has about NT$5.8 billion in cash on hand, and has to meet around NT$15.3 billion debts due this year.

In addition to the revised sales model with Elpida for a steady cash flow, Rexchip will also seek support from its bank creditors and suppliers to maintain company operations, according to Chueh.

Rexchip is ahead of its domestic peers in transitioning to 30nm-class process technology, enabling it to benefit from the DRAM price recovery thus far in 2012. Rexchip's revenues for January 2012 increased 7.4% from a year ago while fellow companies Nanya Technology and Inotera Memories reported on-year decreases in January sales

By: DocMemory
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