Taipei, July 28, 2010 (CENS)--Financial Supervisory Commission of the Executive Yuan, Taiwan`s Cabinet, has recently rejected PowerChip Semiconductor Corp.`s (PSC`s) application for issuing global depository receipts (GDRs) to raise US$179 million, and asked Nanya Technology Corp. to add details to a capital-increase application it recently submitted.

Industry executives pointed out FSC`s moves suggest it is reining in capital-raising requirements, planning to demand all applicants to raise capitals through public instead of private placements when their operations and finances are healthy.

Some institutional investors are worried that FSC`s stringent attitude toward the two cases would hamstring competitiveness of PSC and Nanya, as the two chipmakers are in urgent need of cash to finance expansions and improve process technologies.

PSC planned to issue 650 to 800 million common shares and 65 to 80 million GDRs in the latest application. FSC rejected the application and its senior officials said PSC should raise the application after its finance turns healthy before 2011 as the company said it would use the capital in 2011.

FSC officials pointed out that PSC`s finance is not healthy because of serious losses from 2007 through 2009 and total loss had cumulated to NT$57.6 billion (US$1.8 billion at US$1:NT$32) as of the first quarter this year, a sum reaching 63.07% of its NT$90.4 billion (US$2.8 billion) paid-in capital.

Nanya, an affiliate of the Formosa Plastics Group (FPG), planned to issue 600 million shares in the latest application. But the FSC turned down the application on grounds that some further detail information is needed to make the application a complete one.

(by Ken Liu)