Rexchip Electronics, majority owned by Elpida Memory, expects to post a small second-quarter operating loss. The firm also indicated it now generates consistently positive cash flow from operations and expects to repay its total loans due in 2012.

Rexchip disclosed that without recognizing the loss of accounts receivable from Elpida, the company's core business posted losses of only NT$800 million (US$26.7 million) in the first quarter of 2012. Operating losses for the second quarter should be similar to or lower than the prior quarter's levels, according to president Stephen Chen.

Chen indicated Rexchip now has a monthly output of 75,000 12-inch wafers, which are all shipped to Elpida. To minimize the impact of the parent company's insolvency proceedings, Rexchip accepts cash-on-delivery orders only, Chen said.

Rexchip currently has a positive cash flow, Chen noted, adding that its business collects more than NT$1.2 billion a month. The company is confident that debts worth more than NT$15 billion which are due in 2012, will be repaid on schedule.

Rexchip in 2013 will pay off about NT$2 billion worth of debts. With the pressure to repay debts easing, the company will be able to focus on scaling up its capacity and transitioning to 25nm process technology, Chen pointed out.

Rexchip was established as a joint venture between Elpida and Taiwan-based Powerchip Technology. Powerchip in 2009 sold part of its share holdings to Elpida to repay debts owed to the Japan-based partner, which then become the largest shareholder of Rexchip. However, Elpida's bankruptcy filing in February 2012 has had some negative effects on Rexchip, which ships almost all of its output the the Japan-based firm.