Tue, Jan 18, 2005 - Page 11 News List

Inotera forecasts profit despite drop in prices

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Inotera Memories Ltd (華亞半導體), a chip-making venture between Infineon Technologies AG and Nanya Technology Corp (南亞科技), said it will make a profit this year even as prices for its products drop by about one-third.

"With a 30 percent price drop, we will make a profit," Inotera president Charles Kau (高啟全) said on Saturday at the company's headquarters south of Taipei. Prices have fallen about 30 percent annually in the past 25 years, he said, without elaborating on profit goals.

Inotera has become profitable less than a year after it started operations last April, which was a record for the industry, Kau said.

The venture is building the world's largest memory-chip plant and is proceeding with plans to sell its first shares to the public by early next year, he said.

The Inotera plant will reach monthly production of 54,000 12-inch diameter silicon wafers by the end of this year and increase to capacity of 62,000 wafers a month by about the first quarter of next year, Kau said.

The 12-inch silicon wafers help cut costs by as much as one-third by more than doubling the number of chips that can be made from standard-size 8-inch wafers. Infineon and Nanya are splitting the cost of building the plant, and each will get half of the output.

Infineon and Nanya, which was Taiwan's third-largest memory-chip maker last year after being the largest in 2003, said the plant would cost a total of US$2.9 billion.

Powerchip Semiconductor Corp (力晶半導體) and ProMOS Technologies Inc (茂德科技), which opened 12-inch plants earlier than Nanya, are the largest and second-largest memory-chip makers in Taiwan.

Elpida Memory Inc of Japan on June 9 said it planned to spend US$4.9 billion in three years to build the world's biggest memory-chip plant. Inotera's factory will be bigger than the one Elpida plans, Kau said.

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