Wed, Dec 09, 2009 - Page 12 News List

ProMOS to supply wafers to Elpida

SYNERGY The Taiwanese chipmaker will supply 35,000 wafers to the Japanese company per month, which is half the monthly output of a factory it has in Taichung

By Lisa Wang  /  STAFF REPORTER

ProMOS Technologies Inc (茂德科技), the nation’s third-biggest maker of computer memory chips, yesterday said it planned to initially supply 35,000 12-inch wafers a month to Japanese partner Elpida Memory Inc in exchange for cost-efficient technologies to make next-generation DDR3 chips.

That is more than half the total monthly capacity of a 12-inch wafer plant that ProMOS operates in Taichung.

It also makes ProMOS Elpida’s second Taiwanese dynamic random access (DRAM) partner after Powerchip Semiconductor Corp (力晶半導體), as the Japanese chipmaker is seeking support to gain market share to compete with South Korean industry leader Samsung Electronics Co.

The deal “will help ProMOS obtain advanced technology without the need to invest in expensive equipment such as immersion tools,” ProMOS chairman Chen Min-liang (陳民良) told a media briefing.

For Elpida, the new partnership would help it cope with constrained DRAM supply next year without spending heavily on capacity expansion.

Demand will grow by between 50 percent and 60 percent next year as PC makers projected, while DRAM supplies would increase at a maximum annual rate of 40 percent, Elpida chief executive Yukio Sakamoto told a media briefing in Taipei.

“The capital spending in 2009 will not be enough to support the increase in demand,” Sakamoto said, citing an unspecified forecast that global DRAM makers would budget US$3.9 billion on new equipment, 60 percent lower than US$10 billion spent last year.

“Because of that, I suppose next year will be a much, much better period for the DRAM industry,” Sakamoto said.

Elpida budgeted US$500 million for new equipment this fiscal year, which will end on March 31, and planned to allocate a combined US$1 billion for next fiscal year, Sakamoto said.

Chen said he was optimistic about DRAM demand, adding that PC replacement demand would play an important role.

ProMOS is scheduled to make DRAM chips in the first half of next year, using an enhanced 65-nanometer technology, which the Taiwanese chipmaker said would be able to compete with 50-nanometer technology used by leading chipmakers.

ProMOS is seeking new investors for capital injections to purchase new equipment for producing new DDR3 chips on Elpida’s technology, Chen said.

“We are in talks with four investors, mostly for equity investment in ProMOS,” Chen said. “We think the partnership with Elpida will be helpful in soliciting their support.”

Separately, Chen said the company was in talks with banks to extend a grace period on its credit by another year.

ProMOS has not finalized how much money it will need for new equipment because it is arranging to trade some old machines for new ones.

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