03.23.2001
Integrated Circuit about to short circuit

• Local press reports suggest that Integrated Silicon Solution (ISS, US), the largest shareholder in IC design house Integrated Circuit Solution (ICSI, 5473 'Xi Cheng'), has submitted an application to the Securities and Futures Commission to divest 2m ICSI shares.

• The move follows ICSI's expectation that March revenue will come in low at between NT$300m-350m. ICSI, which focuses on memory products, is suffering under severe price cutting pressure from integrated device manufacturers. The company is also rumored to have high inventory levels and an unfavorable financial budget for 2001. ICSI will decide next week its dividend policy and financial budget for the year.

• ICSI’s share price has fallen 22% since the beginning of March. In view of the drop, ICSI will reportedly talk to ISSI to request a delay in the divestment. We expect any divestment will put additional pressure on the share price.

AngelLo@Primasia.com +886-[0]2-2547-8865