ProMOS Technology shareholders recently approved a company proposal to raise additional paid-in capital through private placement. But the DRAM maker has been struggling to find investors and failed to get financing from potential targets including Kingston Technology, United Microelectronics (UMC) and Elpida Memory, according to industry sources.
ProMOS's plans to issue up to 3.5 billion preferred shares, and also up to 1.5 billion shares of common stock, received the nod from its shareholders on June 10. Company chairman ML Chen has reiterated several times that negotiations with targets of private placement are ongoing.
However, the sources claimed that Kingston has made up its mind to discontinue further investment in ProMOS due to lack of convincing reasons. ProMOS now lags behind fellow DRAM companies in terms of process capacity and technology, plus it has financial problems, the sources indicated.
Kingston had been backing ProMOS, providing financial support during the previous industry downturn, the sources said.
Both UMC and Elpida are also unlikely to participate in ProMOS's planned fundraiser, the sources pointed out. UMC has responded saying it does not comment on speculation.
After selling its China fab, ProMOS now runs only one fab in Taiwan with monthly capacity of about 60,000 12-inch wafers. The company is still using a 60nm-class process to produce chips, and is seeking more capital to purchase new equipment for upgrades.
ProMOS swung to net losses in the second quarter of 2007, and has remained unprofitable since. Losses for the most recent quarter remained high at NT$4.26 billion (US$147 million).