Infineon and Nanya Technology have decided to take Inotera, their memory chipmaking joint venture, public in early 2006 in an parallel initial public offering in Taiwan and Europe.
“Shareholders have approved our IPO plan today,” Charles Kao, Inotera president, said on Tuesday in a telephone interview after a meeting of Infineon and Nanya Technology representatives. “We have set T$40 as a price reference, but of course the market will decide. We need to raise US$500m for our second 300-mm plant which is under construction.”
With 2.51bn shares outstanding, the planned share sale could theoretically become Taiwan's largest IPO in years at T$100bn.
However, Infineon and Nanya Technology, which hold 50 per cent of Inotera each, could also choose to float only part of the company. It is understood that the size of the offering has not been decided yet. Moreover, the plan to sell part of the shares in Europe would split the sale.
Mr Kao said Inotera would apply for approval of the listing from Taiwan's market regulator in mid-October.
If the company's two current shareholders were to sell all shares outstanding, Inotera would become the Dram manufacturer with the largest market capitalization listed on the Taiwan Stock Exchange ahead of Powerchip, the island's largest memory chipmaker by revenue, which has a market capitalization of T$97bn.
The size of the offering is likely to be decided upon closer to the IPO date depending on sentiment in the highly cyclical Dram market.
However, analysts said investor interest in the Inotera sale was likely to be strong because the company is Taiwan's only memory chipmaker which has only the most advanced 300 mm production capacity.
Older fabrication plants, or fabs, in which chips are cut out of smaller 200mm silicon disks are less efficient for commodity Dram production. Manufacturers therefore face additional cost in transforming these older plants into production bases for non-Dram chips like Flash memory.
In contrast to its competitors and its two parent companies, Inotera does not have this kind of heritage burden because it was founded after technology had already migrated to 300mm production.
The company made a net profit of T$2.92bn on revenue of T$9.57bn in the first half of this year, turning around from a loss in the same period last year.