Powerchip aims higher

Powerchip Semiconductor Corp (力晶半導體), the world's No.6 maker of computer memory chips, aims to move up to third place in the coming decade by building more cost-effective factories, a company official said yesterday.

With its early migration to advanced 12-inch fab chip production using 0.11-micron technology, Powerchip strengthened its market share to 4.7 percent in the third quarter, beating Nanya Technology Corp (南亞科技), according to iSupply's preliminary tally released over the weekend.

Powerchip hopes to repeat this success.

"We plan to spend another NT$200 billion at least on building four 12-inch factories, including the one under construction, in order to further reduce our costs," Powerchip chairman Frank Huang (黃崇仁) said during the company's 10th anniversary ceremony.

Powerchip's first 12-inch plant in commercial operation helped boost its gross margin to 49 percent, outpacing the world's top memory chip supplier Samsung Electronics Co's 46.1 percent in the third quarter, the company said.

Next year, the Taiwanese chipmaker plans to start building its third 12-inch fab, once the second advanced plant starts mass production in the second quarter of 2005, Huang said.

"[With the capacity expansion plans in place,] we hope to squeeze into the top-three position in the world's competitive memory chip industry in the next 10 years," Huang said.

But, Paul Tsai (蔡昀達), a fund manager, who helps oversee a NT$500 billion fund for International Investment Trust Co Ltd (國際投信), said caution was warranted.

"There's no guarantee that Powerchip will succeed again by building more advanced 12-inch fabs, despite the previous success."

"There's always uncertainty there in the highly cyclical memory chip industry.," he said.

Powerchip has an eight-inch fab and a 12-inch fab in operation in the Hsinchu Science-based Industrial Park, Taiwan's Silicon Valley.