Formosa Petrochemical will provide one-year loans of NT$5 billion (US$167.34 million) and NT$8.5 billion, respectively to memory affiliates Nanya Technology and Inotera.
The two memory companies indicated that the funds will be used on new equipment procurements and their transition to 42nm. Nanya and Inotera's 2010 capex were NT$30 billion and NT$58 billion, respectively. Though the companies have yet to finalize their 2011 budgets, they are certain that the amount will be less than that of 2010.
Nanya and Inotera will received the loans in the first quarter of 2011.
In November, Nanya's parent company Formosa Plastic Group and affiliates threw their full support behind a Nanya fund raiser. They placed orders for new shares despite Nanya's stock price falling below the NT$16.50 new share offering price at the time, and successfully raised NT$9.9 billion. In addition, Nanya had previously borrowed NT$5 billion from Formosa Petrochemical, bringing the total to NT$10 billion.
Nanya raised its 2010 capex from NT$19 billion to NT$30 billion. Inotera also increased its budget to NT$58 billion from NT$45 billion.