Powerchip Semiconductor Corp (力晶半導體), the nation's biggest computer memory chipmaker, said yesterday that it did not plan to slow its capacity expansion, or reduce its exposure in the spot market despite the continual drop in memory chips prices amid a supply glut.
As of yesterday, the price of a Powerchip share has dropped nearly 30 percent this year to NT$15.2. The price of dynamic random access memory (DRAM) chips have plunged more than 77 percent to around US$1.36 per unit yesterday, market researcher DRAMeXchange Technology Inc (集邦科技) said.
That would put most memory chipmakers under heavy pressure to turn a profit.
Powerchip said in July that it was struggling to turn a profit after prices slid to below US$1.5 per unit.
Rivals Elpida Memories Inc of Japan and Hynix Semiconductor Inc of South Korea said last week that they planned to reduce, or even stop selling chips to the spot market in a bid to stem the price decline.
"Powerchip is the biggest memory chip supplier on the spot market. We will not change this business model. Our expansion plans are also on schedule," company spokesman Eric Tan (譚仲民) told the Taipei Times yesterday.
"We do not want to lose market share by reducing supply, or cutting capacity," Tan said. "And we believe that the DRAM price is hitting the bottom."
Powerchip planned to spend NT$71 billion (US$2.18 billion) on new facilities and equipment this year.
Powerchip said its production would grow around 75 percent annually this year, with half of the increase coming from Rexchip Electronics Corp (瑞晶電子), a 50-50 joint venture with Elpida.
Rexchip produces 30,000 12-inch wafers a month at its first plant in Taichung. It planned to more than double monthly production -- to as much as 70,000 wafers -- in the first half of next year as planned, Tan said.
Rexchip held an opening ceremony for its first 12-inch wafer plant yesterday, which was attended by its chairman Frank Huang (黃崇仁) and Elpida president and CEO Yukio Sakamoto.
Rexchip announced late last year that it planned to spend NT$450 billion to build four 12-inch plants in Taiwan over the next five years.
It is now building the second plant in Taichung, which could start to make chips by the end of next year at the earliest, Tan said.
As for Powerchip, its plan to build two new plants in Hsinchu was stalled this summer when it was unable to obtain land from the government, Tan said.
The two new plants would produce NAND flash memory chips, which are used to store data for consumer electronics such as music players and digital cameras, Tan said.
He refuted a report carried by Bloomberg yesterday that the company would begin construction of the two plants later this year and start making flash memory chips by the fourth quarter of next year.
"It was just media speculation," he said, citing the lack of land for new plants.
Separately, Goldman Sachs Group Inc lowered its earnings estimates on Japanese semiconductor-equipment manufacturers, such as Tokyo Electron Ltd for next fiscal year, citing possible reductions in investments by chipmakers amid declining prices.
"A majority of Japanese semiconductor production equipment manufacturers will likely record lower sales and profits in FY2008,'' Shin Horie, Toshiya Hari and Mari Murakami, Tokyo-based analysts at Goldman Sachs, wrote in a report released on Thursday.
Goldman Sachs said that it expected chip investment to drop by 10 percent next year because foundries will be more cautious about investment and Taiwanese DRAM manufacturers may postpone spending in response to declining prices.
Additional reporting by Bloomberg
SEMICONDUCTORS: The German laser and plasma generator company will expand its local services as its specialized offerings support Taiwan’s semiconductor industries Trumpf SE + Co KG, a global leader in supplying laser technology and plasma generators used in chip production, is expanding its investments in Taiwan in an effort to deeply integrate into the global semiconductor supply chain in the pursuit of growth. The company, headquartered in Ditzingen, Germany, has invested significantly in a newly inaugurated regional technical center for plasma generators in Taoyuan, its latest expansion in Taiwan after being engaged in various industries for more than 25 years. The center, the first of its kind Trumpf built outside Germany, aims to serve customers from Taiwan, Japan, Southeast Asia and South Korea,
Gasoline and diesel prices at domestic fuel stations are to fall NT$0.2 per liter this week, down for a second consecutive week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) announced yesterday. Effective today, gasoline prices at CPC and Formosa stations are to drop to NT$26.4, NT$27.9 and NT$29.9 per liter for 92, 95 and 98-octane unleaded gasoline respectively, the companies said in separate statements. The price of premium diesel is to fall to NT$24.8 per liter at CPC stations and NT$24.6 at Formosa pumps, they said. The price adjustments came even as international crude oil prices rose last week, as traders
SIZE MATTERS: TSMC started phasing out 8-inch wafer production last year, while Samsung is more aggressively retiring 8-inch capacity, TrendForce said Chipmakers are expected to raise prices of 8-inch wafers by up to 20 percent this year on concern over supply constraints as major contract chipmakers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Samsung Electronics Co gradually retire less advanced wafer capacity, TrendForce Corp (集邦科技) said yesterday. It is the first significant across-the-board price hike since a global semiconductor correction in 2023, the Taipei-based market researcher said in a report. Global 8-inch wafer capacity slid 0.3 percent year-on-year last year, although 8-inch wafer prices still hovered at relatively stable levels throughout the year, TrendForce said. The downward trend is expected to continue this year,
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which supplies advanced chips to Nvidia Corp and Apple Inc, yesterday reported NT$1.046 trillion (US$33.1 billion) in revenue for last quarter, driven by constantly strong demand for artificial intelligence (AI) chips, falling in the upper end of its forecast. Based on TSMC’s financial guidance, revenue would expand about 22 percent sequentially to the range from US$32.2 billion to US$33.4 billion during the final quarter of 2024, it told investors in October last year. Last year in total, revenue jumped 31.61 percent to NT$3.81 trillion, compared with NT$2.89 trillion generated in the year before, according to
RSS