The current weakness in DRAM-chip prices is mainly caused by seasonal effects, according to Frank Huang, chairman of Taiwan-based Powerchip Technology. Huang expects demand to be restored in the second quarter of 2011, and prices to rebound.
Huang said that basically he agreed with the view given earlier by Kwon Oh-hyun, head of Samsung Electronics' chip division, that prices for computer chips will likely trend downward until the middle of the second quarter.
When asked whether Powerchip can remain profitable in the fourth quarter of 2010, Huang declined to comment.
Powerchip saw its net profits shrink 71.5% sequentially to NT$1.94 billion (US$64 million) in the third quarter of 2010. But the results showed the company's return to profitability from losses of NT$4.3 billion posted in the third quarter of 2009.
Huang said Powerchip plans to allocate NT$16 billion for its 2011 capex, mainly for its transition to a 45nm process.
In addition, Huang indicated that Powerchip will resubmit its application to issue 650-800 million new shares and global depositary receipts (GDRs), which was previously turned down by Taiwan's Financial Supervision Commission (FSC). Huang did not specify any time-frame.