10.09.2001
Powerchip gains new technology from Mitsubishi

• Mitsubishi, Powerchip’s strategic partner, is licensing logic IC & Embedded Memory IP (Intellectual Property) and production process under 0.18um to Powerchip. The licensing agreement will also include a future foundry commitment from Mitsubishi’s MCU (Micro Control Unit) mixed signal IC ASIC orders. New orders from Mitsubishi are likely to be placed in 3Q02. Foundry now accounts for 15% of Powerchip’s revenue, but typically less than 5% when 128MB DRAM spot price was above US$5 (both loss making levels). We believe the new license will reduce firm’s dependence on DRAM in the long term. However, we advise investors to remain patient for the time being.