ProMOS Technologies Inc (茂德科技), Taiwan's third-largest maker of computer memory chips, yesterday said it would spend US$2.5 billion in building a new advanced plant to meet future demand for bigger memory storage following the launch of Microsoft Corp's Vista operating system.
The new plant would be ProMOS' third 12-inch plant and is set to start mass production by the end of next year at the earliest. It will cut chips from 12-inch diameter silicon wafers.
The large 12-inch wafers can yield more than twice as many chips as the standard 8-inch variety, helping chipmakers save production costs and offer competitively priced products.
"We believe [Microsoft's] Vista operating system will boost demand for memory chips next year," ProMOS spokesman Ben Tseng (曾邦助) told reporters on the sidelines of the groundbreaking ceremony for the new plant in Taichung.
Tseng said feedback from customers indicated that Vista-enabled computers, expected to hit the market next quarter, would be equipped with roughly 35 percent more memory space, compared with computers sold in the first quarter of this year.
For this year, sales of semiconductors around the globe would grow faster than expected, by nearly 8 percent, to US$255.7 billion from US$237 billion last year, researcher iSuppli Corp projected yesterday.
Sales of dynamic random access memory (DRAM) chips would also jump by 8 percent this year, iSuppli said yesterday without giving further details.
"We believe the growth in demand next year will outpace the capacity expansion plans outlined by DRAM manufacturers to date," Tseng said.
To fund the capacity expansion, ProMOS planned to resume fund-raising projects abroad and at home later this year, chairman Chen Min-liang (陳民良) told reporters.
In the middle of last month ProMOS suspended the issuance of global depositary receipts (GDRs). The issuance, comprised of a maximum 1 billion common shares, would obtain around NT$11.9 billion (US$367.4 million) in proceeds based on the chipmaker's closing price of NT$11.9 yesterday.
In addition to the GDR issuance, ProMOS was also in talks with banks for a NT$10 billion in syndicated loan to be granted in the second half of this year, Chen said.
To cash in on future demand, bigger rival Powerchip Semiconductor Corp (
ProMOS posted a 47 percent growth in revenues to NT$11.65 billion for the second quarter, compared with NT$7.91 billion in the first quarter.
"The second quarter was not as slow as expected," Tseng said. "We believe the second half will be even better as PC demand will return to normal with 5 to 6 percent growth year-on-year."
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