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MOEA bureau predicts bright future for chip makers

An estimated year-on-year growth of 10.7 percent in desktop computer sales is expected to absorb the oversupply of dynamic random access memory (DRAM) products, the Ministry of Economic Affairs (MOEA) said yesterday.

"The strength of the nation's memory industry lies in the cost competitiveness of our mainstream 12-inch wafer factories as opposed to other international firms, such as Samsung Electronics Co, whose 8-inch factories are still its major force," Chen Chao-yih (陳昭義), director-general of the MOEA's Industrial Development Bureau (IDB), said yesterday at a media briefing.

In addition to the oversupply of DRAM products last year, the worse-than-expected demand for Microsoft Corp's Windows Vista operating system also contributed to plunging DRAM prices, the IDB said.

As a result, it is estimated that the production volume of Taiwan's memory industry dropped by 14 percent to NT$248.7 billion (US$8.04 billion) last year from the previous year, the IDB's latest report showed.

Powerchip Semiconductor Corp (力晶半導體), the nation's biggest memory chipmaker, predicted earlier this week that prices may rise in about a month after chipmakers scale back production, the Bloomberg newswire reported on Tuesday, citing Powerchip president Brian Shieh (謝再居).

The IDB's report also said the nation's DRAM production volume last year, at US$8.71 billion, accounted for 25 percent of the global market, making Taiwan the world's second-largest producer of DRAM products, behind South Korea.

Aside from continuing to push for the nation's lead in the DRAM industry global market, IDB said domestic firms have also been planning to enter the NAND Flash market, which is thought to have enormous business opportunities in the end product market.

"Although DRAM products currently account for the largest portion of the world's memory market, it is estimated that demand for NAND Flash will surge in the future owing to the fast growing low-cost computer market, such as Eee PC," Eric Lu (呂正欽), section chief of the IDB's information technology industries division, said yesterday.
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