U.S.-backed loan finances Chartered's expansion plans - Hardware _1844

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Singapore's Chartered Semiconductor is counting on a $610 million loan backed by the U.S. government to fund the expansion of its most advanced chip plant, while helping the company keep enough cash on hand to cover its operating costs.
This is where the $610 million loan will be useful for Chartered, helping to finance the expansion of production using the 65-nanometer process, as well as more advanced process technologies slated to roll out in the years ahead. These plans will cost Chartered hundreds of millions in capital expenditure costs this year alone.
 
                                                                                                                                                                                               
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The loan comes at a critical time for Chartered,You are not allowed to view links. Register or Login, which manufactures processors for Advanced Micro Devices. As AMD prepares to introduce a new line of server chips to compete with Intel, the company will increase the number of chips made using a more advanced 65-nanometer manufacturing process. Some of these chips are likely to come from Chartered,You are not allowed to view links. Register or Login, which is gearing up for a jump in the percentage of chips it makes using the 65-nanometer process.
U.S.-backed loan finances Chartered's expansion plans  Hardware
          May 21, 2007               U.S.-backed loan finances Chartered's expansion plans               Singapore's Chartered Semiconductor will use the $610 million loan to expand its most advanced chip plant          By Sumner Lemon  IDGNS                                                Print                                                  Add a comment                                                                                                                                                     
EXIM is a U.S. government agency created to help fund exports of U.S. products, partly by providing loans that match financing terms offered by other governments. As a result, the funds loaned to Chartered under this agreement will be used to purchase equipment from U.S. equipment makers, including Applied Materials, Novellus Systems,You are not allowed to view links. Register or Login, LAM Research, Varian Semiconductor Equipment Associates, and KLA-Tencor, among others, EXIM said.
Chartered executives, which opted to use cash rather than loans to purchase equipment during the first quarter, are determined to see the company's available cash increase to $700 million by the end of this year, the company said in a recent U.S. Securities and Exchange Commission filing. As a result, loans will likely be used to finance upcoming purchases.
The loan could significantly increase the amount of long-term debt that Chartered carries, depending on how fast, and how deep, the company dips into these funds. But Chartered executives want to increase the amount of cash they have on hand for future operating expenses.
The loan,You are not allowed to view links. Register or Login, from JPMorgan Chase Bank and backed by the Export-Import Bank of the United States (EXIM), is divided into two parts and will be made available to Chartered over the next three to five years. The funds are earmarked for equipment purchases from U.S. vendors that will be used to ramp up production at Fab 7, Chartered's 300-millimeter wafer fabrication plant in Singapore.
At the end of the first quarter, Chartered held nearly $1.18 billion in long-term debt, including $324 million from an earlier EXIM-backed loan. At the same time, the company had $518.4 million in cash and untapped loans and credit worth $380.3 million. By comparison, the company had $719 million in cash at the end of December 2006.