Winbond gets ready to take lead

DRAM chip maker Winbond (華邦) will lead Taiwan's production of the specialized silicon chips in a miniaturization and performance race with world leaders Japan and South Korea, as the DRAM market looks set to boom in the next year, analysts said.

"Winbond is ahead of local competitors when it comes to technology. Although [others] are close behind, Winbond is the only Taiwanese DRAM maker now producing 256 megabit chips, which shows its got the technical edge," National Securities and Finance analyst Steve Lin (林勇輝) said.

DRAM prices are set to rise as the last 2 years' excess capacity gets soaked up by demand early this year, Lin added.

"Global demand will exceed supply in the second quarter of 2000, as overall demand increases. In the 64 megabit category, overall demand this year will be 3.5 billion units, up 400 million on last year," Lin added.

SG Securities analyst Abraham Leu (呂穎漳) said he questioned forecasts by some institutional analysts of demand being four percent greater than supply this year.

"It's a moving target with lots of variables like capacity, expansion speed, technology IC migration, PC demand and so on. It's very dynamic, so to come up with a figure now is a bit premature .... But the trend is there's going to be a shortage," Leu said.

The relatively small size of the nation's DRAM producers and the necessity to import all production equipment from abroad were significant factors limiting Taiwan's DRAM production, he added.

"If you don't have a big market share then it's difficult to get hold of the most advanced technologies," Leu said.

Winbond's DRAM production is based on technology bought from Toshiba.

However, Winbond is currently co-developing DRAM manufacturing technologies with the Japanese firm below the 0.2 micron transistor circuit width limit, a company spokesman told the Taipei Times.

"In the first half of next year we will have perfected the 0.17 micron process, which will be a joint product," he said.

"We now are number four in the world for 256 megabit, after Samsung, Siemens and Toshiba," he added.

The bulk of the world's digital random access memory chip production still centers on 64 megabit and the more complex 128 megabit chips, with demand still relatively low for the highly advanced 256 megabit chips.

Aside from DRAM, production of Internet-related chips -- including switch ICs, network cards, IC cards, and server IC cards -- will be a major driver of Taiwan's semiconductor industry in the next two years, Lin said.

"But mainstream foundries like TSMC will continue to be the backbone of chip production," he added.