Powerchip Semiconductor Corp (力晶半導體), Taiwan's top maker of computer memory chips, is building a third cost-saving factory in order to expand production, gambling on future demand from computer manufacturers and consumer electronics, a company executive said yesterday.
The latest investment is part of Powerchip's plans to build four new advanced 12-inch factories at a cost of NT$300 billion (US$9.24 billion) over the next five years, the chipmaker said.
"Our capacity will not be able to meet global demand [in the future], if we do not build plants now," said Frank Huang (黃崇仁), chairman of Powerchip, on the sidelines of a groundbreaking ceremony for its new 12-inch fab in Taichung.
Yukio Sakamoto, chief executive of Elpida Memory Inc, which sources memory chips from Powerchip in exchange for technological support, told the Taipei Times in Taichung yesterday that it was increasing orders at an unspecified rate to meet rising demand.
The Taichung factory is scheduled to start mass production during the final quarter of next year. It will make a maximum 60,000 wafers a month, according to the company. Currently, Powerchip operates two 12-inch plants and one less-advanced 8-inch plant in Hsinchu.
Despite Huang's expectations for rising demand, on the spot market the price for computer memory chips is on the decline because of sagging demand for computers, market researcher DRAMeXchange said.
The benchmark DDR2 512MB/64Mb/533MHz memory has fallen 3.6 percent over the past 10 days to US$4.72 per unit as of yesterday, DRAMeXchange said.
"The second quarter is normally a slow season. But, we expect the price to hit bottom in June," Huang said.
He added that new supply would be quite limited in the near term as big players such as industry leader Samsung Electronics Co focused on making data flash memory chips for consumer electronics rather than computer memory chips.
With new output from the factory to come on-line next year, Powerchip, which now has a 5 percent share of the global computer memory chip market, would be able to gobble up more share, Huang said without giving any details.
In addition, the new factory will manufacture computer memory chips and data flash memory chips for consumer electronics products, Huang said.
Powerchip is scheduled to start supplying 2-gigabyte flash memory chips to Japan's Renesas Technology Corp next quarter and 8-gigabyte chips next year, Huang said. The company currently makes low-density one-gigabyte flash memory chips for Renesas.
Powerchip would expand capital expenditure for this year to more than NT$60 billion from its previously estimated NT$30 billion after acquiring a mothballed factory from local flash memory chipmaker Macronix International Co (旺宏電子) in January.
Last year, Powerchip spent roughly NT$50 billion on new equipment.
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