UPDATE: Inotera Falls After Pricing GDRs At 10% Discount
2009年7月31日 - 1:11PM
Dow Jones News
Shares of Inotera Memories Inc. (3474.TW) fell Friday after the
memory-chip maker said it would sell 64 million Global Depositary
Receipts at a 10% discount to its closing share price Thursday.
At 0335 GMT, Inotera was down 2.0% at NT$17.45, compared with
its closing price Thursday of NT$17.80, underperforming the main
index's 1.2% gain.
The company, a joint venture between U.S.-based Micron
Technology Inc. (MU) and Taiwan's Nanya Technology Corp. (2408.TW),
said in a statement it priced 64 million GDRs at US$4.8757 each.
The GDRs are backed by 640 million new shares at NT$16.02 each.
According to a Dow Jones Newswires calculation, the chip maker
will raise US$312.04 million from the sale.
"Given the difficult market conditions in the memory-chip
sector, the pricing is actually pretty good," said Stephen Huang,
an analyst at IBT Securities Investment Consultant Co.
Huang has a neutral recommendation on Inotera with a target
price of NT$20.00.
Using the funds from the GDR sale to upgrade to 50-nanometer
production technology from 70 NM will improve Inotera's
competitiveness against its local peers in terms of technology and
cost savings, Huang said.
Typically when chip makers produce a new advanced memory chip,
manufacturing costs are steeper in the early stages but the cost
per chip falls as production of the advanced technology is ramped
up.
Nonetheless, the adverse environment for the memory-chip sector
as a whole is likely to continue, as prices have risen only
slightly recently, Huang said.
A supply glut since 2007 has driven down the price of the
mainstream double data rate 2, or DDR2, chips, dragging most
memory-chip makers into the red. As a result, producers have cut
production and trimmed capital spending budgets, supporting a
slight rebound in prices, but most chip makers still aren't making
money from DDR2.
DDR3 chips that use 50 NM currently enjoy a price premium to
DDR2 chips, but that benefit is likely to be short-lived as
analysts say DDR3 chips are set to become the mainstream memory
chip used in personal computers by early next year.
A chip's transistor components and the spaces between them are
measured in nanometers. The smaller and more closely transistors
can be packed together, the more powerful the chip.
-By Jessie Ho, Dow Jones Newswires; 88622 502-2557;
jessie.ho@dowjones.com