Shares of Taiwan-based contract chipmaker Powerchip Semiconductor Manufacturing Corp. rose by more than 50 percent on Monday as it made its debut on the Taiwan Stock Exchange (TWSE), buoyed by a rosy outlook about the pure-play wafer foundry industry at a time of tight global supply, dealers said.
Powerchip shares closed at NT$75.90 (US$2.73), up 52.10 percent from its issuance price of NT$49.90, as the honeymoon effect helped the stock offset the impact on the local market from U.S. market losses Friday, when the tech-heavy Nasdaq index tumbled 1.92 percent and Dow Jones Industrial Average lost 0.17 percent on disappointing U.S. jobs data, dealers added.
Newly listed stock in Taiwan is not restricted by the maximum daily 10-percent increase or decline during the first five trading sessions after its listing.
Soon after the local equity market opened, Powerchip shares attracted a lot of buying as its price rose by 56.31 percent, and the stock’s strong showing continued into the end of the session as investors took cues from the company’s strong bottom line in the first nine months of this year.
In the first nine months of 2021, Powerchip posted a record high of NT$9.89 billion in net profit with earnings per share (EPS) at NT$3.07. The market has estimated its EPS for the entire 2021 will hit NT$4.50 due to a robust fourth quarter.
Powerchip generated NT$58.75 billion in consolidated sales for the first 11 months of this year, up 40.76 percent in the wake of increasing pricing power as supply on the global market was not able to meet demand.
Powerchip, one of four contract chipmakers in Taiwan, specializes in mature technologies and owns two 8-inch wafer fabs with a monthly capacity of 110,000 units, and three 12-inch wafer plants with a monthly capacity of 110,000 units.
The other three Taiwanese contract chipmakers are Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest which commands a share of over 50 percent in the world’s market; United Microelectronics Corp. (UMC); and Vanguard International Semiconductor Corp.
At the company’s initial public offering (IPO) ceremony Monday, Powerchip Chairman Frank Huang (???) said Powerchip was the sixth-largest contract chipmaker in the world and the third-largest in Taiwan after TSMC and UMC.
Huang added he had high hopes that Powerchip would soon become the fifth-largest in the world citing orders that the company has secured to boost its shipments for 2022.
Powerchip’s predecessor was Powerchip Technology Corp., a dynamic random access memory (DRAM) supplier, which suffered heavy losses in a DRAM cyclical downturn in 2012, when Huang was the company’s chief executive officer.
The DRAM maker sold its assets to U.S.-based Micron Technology Inc. and then delisted its shares from the TWSE in December 2012.
Under Huang’s leadership, Powerchip Technology went through business restructuring and transformed itself into a pure-play wafer foundry business by rolling out driver ICs for flat panels, imaging processors, and power management chips, enabling the company to repay its bank debt of NT$120 billion and turn a profit.
Powerchip Technology then spun off its pure-play wafer foundry business which became Powerchip Semiconductor.
According to the contract chipmaker, its major clients have rushed to sign long-term contracts to secure long-term supplies to fend off the impact from the current supply shortage.
Amid optimism over Powerchip Semiconductor’s outlook, both a U.S. and a European brokerage have issued a target price of NT$87 for the company’s shares.
According to the TWSE, a strong showing on the first day of its listing resulted in Powerchip Semiconductor’s market capitalization hitting NT$258.82 billion, the highest among all enterprises which have launched an IPO on the main board in the past three years.
Through the IPO, Huang said, his company had raised sufficient funds for its planned NT$100-billion plant in Miaoli County.
Source: Focus Taiwan News Channel