Winbond Electronics Corp (
Taiwan's biggest maker of computer memory chips by market value plans to make 12-inch wafers, which yield more chips after cutting than current 8-inch standard, said spokesman Mike Liu (
The management bureau of the Hsinchu Science-based Industrial Park (
The land, which is among the final parcels available in the high-tech park, is presently occupied by the military.
Rivals ProMOS Technologies Inc (
"It has to do this," said James Chen, who manages NT$1.8 billion in stocks at National Investment Trust Co (
The chipmakers are betting higher output and lower production costs from the larger wafers will boost profit at a time when falling demand for chips used in computers, cellphones and other consumer electronics has driven memory chip prices below the cost of production.
The current industry standard 128-megabit 8x16 PC 100 dynamic random access memory chip fell to US$1.65 yesterday, its lowest this year. That compares with US$17.90 in July 2000.
Winbond plans to start building the new plant at the end of this year and start production in the first quarter of 2004. It will use the plant to make memory chips using 0.11 micron manufacturing technology that fits more integrated circuits on a chip, increasing speeds and lowering costs.
"If we don't build the plant, we won't be able to migrate to below 0.13 micron and will lose competitiveness," Liu said.
Still, adding capacity to a market already saturated with chips could delay a recovery and force closures or consolidation in the sector.
On Tuesday, NEC Corp, the third-largest chipmaker, said it would cut 4,000 jobs in its semiconductor division worldwide and withdraw from memory-chip production within three years to reduce costs and boost profit.
"The new plants will add to the oversupply, but everyone wants to step in to 12-inch wafer chip production and wait for the competition to fall down," said Chiang Chih-hau, who manages NT$1.5 billion in bonds and stocks at Barits Securities Corp (
After Winbond's plant is completed, it will convert production at its two 8-inch plants to flash memory chips and may make chips on a contract basis for Fujitsu, Liu said.
Flash memory chips retain data when electronic devices are switched off.
Winbond will decide on the source of funds for the project after it receives approval from the Hsinchu Science-based Industrial Park Administration, Liu said.
Offering stakes to companies rather than the public may help Winbond at a time when rivals such as Nanya are finding it difficult to raise money because of tumbling share prices. Nanya plans to raise money overseas after it was forced to lower its estimates of how much it could raise in Taiwan.
"It's a good idea to invite someone to share the risk," Chen said. "It's not a good time to get money from the capital markets right now with investors scared of fluctuations in the DRAM market." Winbond makes chips for Toshiba Corp and is developing the advanced production technology with the Japanese company's help.
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