DRAM maker Powerchip seeks to cut costs, sell assets

TAIPEI, Jan 5 (Reuters) - Loss-making Powerchip Semiconductor Corp (5346.TWO), Taiwan's biggest DRAM maker, said on Monday it will look to trim costs further and sell off non-core assets in a bid to survive the chip sector's worst ever downturn.

The company, which is facing weakening demand and a large oversupply of the dynamic random access memory (DRAM) chips used in personal computers, also said Chairman Frank Huang would forgo his salary from Monday until Powerchip returns to profit.

"Our government has given (us) its policy to save the industry, and companies also have to do something," Powerchip said in a statement.

Powerchip added it would move further up its technology ladder to reduce manufacturing costs and study other plans aimed at ensuring its survival.

"As long as market conditions don't deteriorate further, the company can sail through the tough time without direct fund injection from the government," it said.

Powerchip said chip prices could recover in the second half of the first quarter following an industry-wide cut in production.

In late December, Powerchip deepened previous output cuts and applied for government assistance, making the company the second major DRAM maker in Taiwan to apply for such help after rival ProMOS Technologies (5387.TWO).

Powerchip's announcement came after the Taipei stock market closed on Monday, when its shares fell 2.6 percent. Taiwan's main TAIEX share index jumped 2.3 percent.

Taiwan's economics ministry has said it would support the struggling local DRAM industry by helping it to develop more local technology and boosting its global competitiveness.