Music Corp turns around operations of US-based unit

Technology holding stock Music Corp. has made a significant impact on the operations of its US-based subsidiary Music Semiconductors Inc. (MSI) to keep the latter’s court-supervised rehabilitation plans on track, a company official told the Philippine Stock Exchange.

Music Corp. corporate secretary Jimmy Soo said since the parent firm took over MSI’s operations in March 2002, "MSI has achieved an unbroken record of profitability and positive cash flow."

MSI, its 90 percent subsidiary, is currently under involuntary petition for Chapter 11 proceedings in the Bankruptcy Court of the Northern District of California. It has filed its plan of reorganization and disclosure statement with the court, with the next hearing to consider the plan set on the first week of March 2003.

Soo said that for 2002, MSI estimates its net profit to have reached $1.63 million, a substantial turnaround from a $7.78 million loss in 2001. In the first three quarters of last year, MSI reported a net income of approximately $1 million or P52.73 million.

Based in Silicon Valley, MSI is a semiconductor company that provides complete silicon-based solutions to support Internet protocol packet routing and switching products made by major networking OEMs (original equipment manufacturers). But the stiff competition and the global slowdown in demand over the past years took its toll on MSI’s operations, putting the company in dire financial straits.

Last year, MSI was able to wipe out 70 percent of its debt load with the proceeds of $4.62 million from the sale of one of its major assets, its ternary CAM acquired by Micron Technology, a leading American semiconductor company.