Shares of Powerchip Technology will be delisted from Taiwan's over-the-counter (OTC) securities market if the net worth of its shares stays negative until the end of October – the due time for filing company financial statements. The net value of Powerchip's shares was dragged down to the negative territory in August, according to the data disclosed by the company.

Powerchip saw its net value slip to NT$0.28 (US$0.009) per share at the end of the second quarter from NT$0.86 at the end of the first quarter, though the company reported that net losses for the second quarter shrank 45.3% sequentially to NT$3.04 billion.

Powerchip claimed that it has been generating cash inflow. The company added that it may consider continuing to dispose assets or plans to raise new funds in order to increase operating income and reduce its debt ratio, but admitted that it now has little time to prevent delisting.

Powerchip recently announced that it had completed the registration process to change its registered capital. Powerchip plans to carry out a 60% cut in the company's paid-in capital to shore up its net value per share, and is scheduled to trade its new shares on the OTC stock market on September 28. However, with the DRAM market deteriorating at an extremely fast rate, Powerchip has seen its debt-to-income ratio exceed 100%.

Powerchip's stock has already been downgraded to requiring full-cash delivery.

Previous reports suggested that Powerchip had been in talks over the sale of its P3 12-inch wafer plant located at the Hsinchu Science Park (HSP), northern Taiwan. Globalfoundries and Taiwan Semiconductor Manufacturing Company (TSMC) were once identified as potential buyers.

Powerchip indicated that the company continues to operate its P3 fab with a monthly capacity of 40,000 12-inch equivalent wafers – mainly for the manufacture of DRAM memory. Powerchip revealed plans to cut back production to mitigate the impact of falling DRAM prices.

Capacity at Powerchip's two other fabs – P1 and P2 – is now being used for the production of non-DRAM products on an OEM basis, the company added. Powerchip noted that the firm has utilized 100% of its capacity – estimated at 60,000 12-inch wafers monthly – with the visibility of its contract-manufacturing orders extending through the end of 2012.