Rexchip Electronics Corp (瑞晶電子), 64 percent-owned by Japan’s Elpida Memory Inc, yesterday said it planned to nearly double its capital spending to US$380 million this year to convert its production lines to cost-efficient 40-nanometer technology.
Rexchip makes dynamic random access memory (DRAM) chips at a 12-inch plant in central Taiwan, using technologies jointly developed with Elpida. Taiwan’s No. 2 DRAM maker, Powerchip Semiconductor Corp (力晶半導體), owns a 32-percent stake in Rexchip.
The technology migration will help Rexchip expand annual output by 30 percent this year, company president Stephen Chen (陳正坤) told a media briefing in Taipei yesterday.
Rexchip will save 30 percent in costs for new 2-gigabyte DDR3 (double-data-rate third generation) chips compared with the cost of producing 1-gigabyte DDR2 (double-data-rate second generation) chips, Chen said.
Last year, Rexchip spent US$200 million on new equipment.
The unlisted company’s capacity expansion plan came as rapidly rebounding demand caused supply constraint, which helped chip prices stabilize in the slack fourth quarter last year.
The market is “very healthy. Most players do not have any new fab. They only do [technological] migration, which will be translated into 40 percent [year-on-year] growth. But demand is much larger than that,” Hideki Gomi, director of Elpida’s DRAM business unit, said yesterday in Taipei.
Gomi expects DRAM prices to hold steady in the first quarter on the back of the chip shortage.
To match rising demand, Elpida plans to increase its own capital spending to US$600 million in the fiscal year to March 2011, up 20 percent from US$500 million this fiscal year, to tap rising demand, company chief executive Yurio Sakamoto said last month in Taipei.
Rexchip plans to list its shares on the local stock market by the end of this year at the earliest, Chen said. Rexchip has issued 2.95 billion capital shares.
Rexchip hopes to earn NT$12 billion (US$377 million) this year, if chip prices hold steady in the remaining year, Chen said. The three-year-old DRAM maker started making profits last quarter after posting three years of losses in a row. Last year it made NT$24.5 million in profit.
Separately, Rexchip yesterday said it planned to spend US$130 million to set up a research-and-development center this quarter in collaboration with Elpida to develop next-generation technology.
Elpida said it would transfer new process technologies to its local manufacturing partners, including Powerchip, ProMOS Technologies Inc (茂德科技) and Winbond Electronics Corp (華邦電).
Powerchip plans to start a pilot run of 40-nanometer technology in the second half of this year, company spokesman Eric Tang (譚仲民) said on the sidelines of the press conference.
Tang said the company has sufficient reserves to redeem US$133 million in convertible bounds that will be due on Feb. 2 because it has generated NT$7 billion after making its first quarterly profit in 10 quarters.
Shares of Powerchip rallied by the 7 percent daily limit to close at NT$4.3 yesterday, beating bigger rival Nanya Technology Corp (南亞科技), which gained 3 percent.
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