GloFo tipped to buy Powerchip fab

Powerchip has stuck a card in the local tobacconist to flog its second-hand, low mileage P3 12-inch Fab, as is where is, and word on the street is that it’s looking at a number of bids for the plant including one from GloFo.

Taiwanese media reports have been suggesting that GlobalFoundries, which has been trying to get a foot in the door in Taiwan’s IC design sector, is the latest bidder attempting to acquire Powerchip’s P3 fab.

GloFo had pulled the plug on development of its own fab in deepest darkest Abu Dhabi due to what it called “uncertain conditions.” It is nice that the outfit has found some certainty on the other side of the world.

Powerchip Technology said today that it was unsure who will acquire its P3 12-inch wafer facilities. Powerchip Vice President Eric Tan said the company has yet to make a decision on the P3 fab disposal plan as the process will involve a bidding stage.

But Powerchip is in the position of having to flog something to make its bank creditors happy. In November the banks approved a one-year rollover on a $618 million loan that would have matured in mid-December. Apparently, they are helping it find the best buyer.

This is a long way from the beginning of the year when we reported how Powerchip was going to try to boost the flagging price of RAM when Huang said that between April and June demand for DRAM would exceed supply.

It looks like that didn’t pan out and things got worse for the chipmaker. The writing was on the wall a few weeks after Huang’s upbeat comment – Elpida announced it was going to take over some of Powerchip’s facilities

Currently, the P3 factory churns out about 40,000 dynamic random access memory (DRAM) chips a month and is largely surplus to Powerchip’s overall production requirements.

Powerchip is one of many DRAM makers who have had a year suffering from oversupply and a price slump. Flogging a fab is just one of the more drastic ideas that are being mulled over.

We shot GlobalFoundries a questions about buying in Taiwan while mothballing its own plans but it says it doesn’t comment on rumour or speculation.