08.15.2001
Powerchip cuts target as DRAM price founders

• Development: Powerchip cut its revenue target from NT$21.5bn to NT$13.9bn, a 35.5% revision on depressed DRAM price. Pretax target was slashed from NT$3.46bn to negative NT$3.65bn (after tax loss of negative NT$2.96bn), with EPS projected to negative NT$1.23. In response, firm plans to raise funds with 250m GDRs.

• Analysis: Powerchip remains a top DRAM play in Taiwan in terms of cost advantage and technology. However, the sector awaits a pick up in demand to solve current oversupply problems, with some DRAM price recovery expected by 4Q01.

• Primasia View: We believe Powerchip is a good DRAM company as it remains one of the top competitors in the sector.