CSMC to cut cash dividends

CSMC Technologies said that it plans to use cash raised through its Hong Kong initial public offering for expansion purposes and will not issue cash dividends after the listing. In the 2003, CSMC paid US$13 million in dividends when its net profits totaled US$4.02 million. The firm also granted US$1.33 million worth of bonus shares to shareholders in March. The Wuxi, Jiangsu province-based semiconductor manufacturer plans to boost production at its current six-inch silicon wafer factory and construct an eight-inch wafer factory in two stages beginning by 2005. The expansion is projected to cost US$398 million while CSMC's IPO is expected to raise US$60-90 million. CSMC officials said company plans to use profits, bank loans and the support from the Wuxi government to pay for the expansion. The company said that it will consider offering scrip dividends in place of cash.