Thu, Mar 16, 2006 - Page 12 News List

Nanya Technology set to start making flash memory chips


Nanya Technology Corp (南亞科技), the nation's second-largest manufacturer of computer memory chips, plans to start making flash memory chips, which are used in consumer-electronics products such as digital music players, a company executive said yesterday.

With growth stabilizing in the computer memory-chip industry, this is one of Nanya Technology's strategies to seek new growth areas.

"Nanya Technology aims to be a memory company offering full solutions," company president Jih Lien (連日昌) told reporters yesterday.

The company has been carefully assessing the feasibility of entering the highly competitive market, which is dominated by Seoul-based Samsung Electronics Co. Now, Nanya Technology is "aggressively preparing" to start manufacturing flash memory chips, Lien said.

He made the remarks on the sidelines of a groundbreaking ceremony for Nanya Technology's new plant valued at NT$80 billion (US$2.47 billion). The factory is the first cost-saving 12-inch facility fully owned by Nanya Technology. The company currently has two 8-inch plants and owns 45 percent of a 12-inch plant through Inotera Memories Inc (華亞科技), a joint venture with Infineon Technologies AG.

Lien said that the company would tap into the flash memory sector after securing a foothold in the computer-chip market.

Nanya Technology would start supplying flash chips after boosting its market share to more than 10 percent, he said.

The company expects to hit that goal late next year at the earliest after the new 12-inch factory starts mass production in the final quarter of next year, Lien added.

The chipmaker now holds a share of around 8 percent in the global computer memory chip market.

"To get started in the flash memory business, it is an option to supply chips on a contract basis," Lien said.

Japan's Toshiba Corp, the world's No. 2 maker of NAND-type flash memory chips after Samsung, reportedly plans to build a second factory to greatly boost its production of the chips and so enhance its competitiveness. Research firm iSuppli has projected that the NAND flash market will expand by 140 percent to US$26.1 billion by 2009 from this year.

However, local firms might be unable to benefit from the growth, as the technology barrier was the biggest hurdle Taiwanese companies needed to overcome, said Liu Szu-liang (劉思良), an analyst at Yuanta Core Pacific Capital Management (元大京華投顧).

"Taiwanese companies are forced to expand into the flash memory market, as the computer memory chip industry is maturing. But without technological support, it is a real challenge," Liu said.

Taiwan's top computer memory chipmaker, Powerchip Semiconductor Corp (力晶半導體), spent five years searching for technology partners.

The company currently supplies flash memory chips to Renesas Technology Corp of Japan in exchange for a transfer of technology. The two companies last month signed an agreement to deepen their technological cooperation.

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