Powerchip Technology has unveiled plans to reduce its paid-in capital by 60%, or about NT$33.24 billion (US$1.13 billion), to NT$22.16 billion in order to improve the net worth of its stock, according to the company.

The net worth of Powerchip's shares currently stands at NT$0.86 per unit, according to company data.

After the planned capital reduction, the company plans to issue up to six billion new shares through private placement aiming to further improve its financial structure.

Powerchip also said it plans to require Elpida Memory to release its holdings of a 60% stake in Rexchip Electronics to Powerchip if the Japan-based DRAM chipmaker does decide to hand over its management to Micron Technology.

Powerchip may also require compensation from Elpida based on a previous deal allowing the two companies to share capacity and equity of Rexchip, according to industry sources. Powerchip currently holds a 21.31% share of Rexchip.