Inotera Memories mulls building new chip plant

Inotera Memories Inc (華亞科技), a joint venture between Nanya Technology Corp (南亞科技) and Qimonda AG of Germany that manufactures computer memory, is considering building a new advanced plant to drive growth. Qimonda was previously Infineon Technologies AG's DRAM division.

Inotera said it had recently spent about NT$2 billion (US$60.6 million) to purchase a 6.7-hectare parcel of land from the Taoyuan government, to be used for the new plant. The company has planned to spend NT$40 billion on new facilities and equipment this year.

"We are in position to seek further growth," said Kai Strohbecke, vice president of Inotera, on the sidelines of the opening ceremony of the company's second plant.

A 12-inch chip plant using 90-nanometer technology would cost US$2.5 billion, Strohbecke said.

Building a plant to use the more advanced 75-nanometer technology would add 15 percent to the price, he said.

But Strohbecke emphasized: "With the land secured, we have no concrete plan for further development. The decision will be made on market situation."

Taiwanese computer memory chipmakers are among the most aggressive players in the world in expanding their capacity.

Inotera said it would produce 120,000 12 inch wafers by the end of this year, an increase of more than 70 percent year-on-year, following a 90 percent increase last year.

Rival Powerchip Semiconductor Corp (力晶半導體) said its output would increase 75 percent year-on-year by spending NT$69 billion on new equipment.

Oversupply has caused the price of computer memory chips, or dynamic random access memory (DRAM) chips, to plunge over 40 percent since the beginning of this year.

"The price is dropping drastically, but we believe the decline will spur demand in the upcoming one or two quarters," Inotera president Charles Kau (高啟全) said.

The third quarter may be the bottom for the falling prices, Kau said.