Powertech Acquires Spansion's Suzhou Factory

Taipei, Aug. 27, 2009 (CENS)--Powertech Technology Inc., a chip assembler mostly held by DRAM chipmaker PowerChip Semiconductor Corp. (PSC), recently took over a factory opened by Spansion in Suzhou of mainland China, offering it the access to the hefty mainland market for chip packaging and test services.

Powertech acquired the factory for US$51 million through its affiliate Powertech Holding (B.V.I) Inc. when the bankrupted Spansion was seeking to liquidate the factory.

Industry watchers point out that the acquisition offers Powertech a chance to catch up with its domestic rivals in competition in the mainland market. Until the deal, Powertech only had a minor output capacity at a factory in Shenzhen run by Kingston whereas Advanced Semiconductor Engineering Inc. (ASE), Siliconware Precision Industry Co., Ltd. and Kyec Yuan Electronics Co., Ltd. had made impressive progress in obtaining production capacity in the mainland.

In light of global memory-chip market bottoming out, Powertech has resumed capital expenditure projects and will spend 70% more capital on expansions this year than it did a year earlier. Most of the outlay, set at NT$5 billion (US$151 million at US$1:NT$33), will go to finance its DDR3 chip production, which will expand to account for 30% of its revenue next month and further to 50% at yearend from current 20%.

Powertech had revenue of NT$2.6 billion (US$80.3 million) in July alone, setting another new high this year. It has projected revenue for this quarter to surge 12% sequentially past NT$8 billion (US$242 million) peak.