Nanya Technology Corp (南亞科技), the nation's biggest maker of computer-memory chips, said a dispute between Infineon Technologies AG and Mosel Vitelic Inc (茂矽電子) over their chipmaking venture will hurt investor confidence in Taiwan's chip industry, one of its biggest.
"This will definitely have a bad impact on foreign investment in Taiwan," Nanya Vice President Charles Kau (
Munich-based Infineon and Taipei-based Mosel are battling for control of ProMos Technologies Inc (茂德科技), which has a plant capable of making 12-inch silicon wafers that cut the costs of chip production by about a third. Infineon holds 30 percent of ProMos, while Mosel owns 35 percent.
"What investors want to know is whether this golden goose will be killed," said Christopher Palmer, who counts shares in ProMos among the more than US$50 billion he helps invest globally for Gartmore Investment Management. "This new factory has obviously been successful."
Taiwan has five companies that make memory chips. South Korea has two, and Europe, Japan and the US have one each.
ProMos and Infineon are among the world's first memory-chip makers to have factories that can produce wafers larger than eight inches in diameter. Infineon, after posting losses for six quarters, is trying to shift more production to Taiwan to take advantage of the island's lower costs.
The German company decided to quit its Taiwan venture after two Infineon directors and a supervisor were removed from the board at a ProMos shareholders' meeting on Jan. 11, hours after being elected.
The next day, Infineon said it would sell its entire stake.
In December, too, Infineon had said it planned to sell its ProMos stake after scrapping technology and purchasing agreements in a dispute with Mosel. At the Jan. 11 meeting, ProMos shareholders gave President Chen Min-liang (
ProMos may post a profit in the first quarter of this year if chip prices hold, Chen said in an interview. Analysts expect the company to announce a loss for the fourth quarter of last year, completing a second full year of loss.
Still, the quarter may have seen the start of a turnaround.
Chen said the company turned profitable in November. Last week, ProMos also said December sales more than tripled to NT$2.4 billion (US$69 million) from a year earlier.
The most recently quoted spot price of a benchmark 128-megabit double-data-rate memory chip was NT$2.90, down from a peak of NT$4.4 on Nov. 4.
The price drop shows the memory-chip industry has yet to recover from the slump of 2001, when global sales tumbled by about one-third to US$13 billion. Nanya and Samsung Electronics Co of South Korea were probably the only companies among the 10 global makers of dynamic random-access memory chips to make a profit in 2002, analysts said.
Taiwanese memory-chip makers have been investing in plants equipped with the latest machinery. Infineon and Nanya, which in May agreed to form a manufacturing venture, have started building a factory that will begin production late this year.
"Our business model with Infineon is different from that between Infineon and Mosel," Nanya's Kau said. "We are developing technology together with Infineon, and we are doing sales and marketing independently." Infineon said it is the sole owner of the technology that ProMos uses.
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