Nanya Technology plans to issue new shares through a private placement to raise additional capital, with an affiliate of parent company the Formosa Plastic Group committed to subscribing to some of the shares.

Nanya has decided to issue 3.8 billion new shares for sale to the target investors, with the proceeds to be used to improve its financial structure and increase working capital, the company said. An estimated NT$6.46 billion (US$215.8 million) will be raised from the private share issue.

Having already backed Nanya's previous fundraisers, Nan Ya Plastics will subscribe to about NT$4.2 billion worth of the new Nanya shares, according to industry sources. The remaining NT$2.26 billion worth of shares will likely be acquired by Nanya's existing or potential clients, most-likely IC design houses, the sources disclosed.

Nanya is seeking to draw strategic investment from IC design firms specializing in specialty DRAM and other niche-market memory chips, the sources pointed out. Neither Micron Technology nor memory module makers are being targeted by Nanya, which has moved its business focus from PC DRAM to niche-market parts, the sources said.

Etron Technology and Elite Semiconductor Memory Technology (ESMT) are both being identified as the design firms approached to participate in Nanya's upcoming private placement, according to the sources.

In other news, Nanya announced that Jih Lien has been elected as the company's vice chairman. Charles Kau will succeed Lien as president for Nanya.