Fri, Mar 13, 2015 - Page 13 News List

Nanya to invest NT$40bn in upgrades

‘LIFESAVER’:The company said it would use 20-nanometer technology upgrades to produce low-power DDR4 chips, which it is set to begin producing in volume in 2017

By Lisa Wang  /  Staff reporter

Nanya Technology Corp (南亞科技), the world’s fourth-largest DRAM chipmaker, yesterday said its board has approved a spending plan that would see NT$40 billion (US$1.27 billion) invested over the next two to three years in upgrades to manufacturing facilities that would allow it to produce 20-nanometer (nm) DRAM chips.

That would make Nanya Technology the world’s fourth chipmaker capable of supplying 20nm DRAM chips after Samsung Electronics Co, SK Hynix Inc and Micron Technology Inc’s Inotera Memories Inc (華亞科技).

Inotera is a DRAM venture between Micron and Nanya Technology.

The advanced technology “will be a lifesaver for Nanya Technology,” company president Charles Kau (高啟全) told reporters.

“Only 20nm technology can be used to [cost-efficiently] make low-power DDR4 and DDR4 chips, which together will account for 80 percent of the world’s DRAM market in 2018,” he said.

Samsung’s newly released Galaxy 6 smartphone and One M9 handset from HTC Corp (宏達電) are equipped with low-power DDR4 chips, Kau said.

“Without low-power DDR4 chips, Nanya Technology’s sales and revenue will run out of steam in the future,” Kau said.

To fund the technological migration, Nanya Technology plans to raise up to NT$20 billion by issuing fresh shares to new strategic partners and by arranging bank loans in the second half of this year.

Kau declined to comment on speculation that Japan’s Toshiba Corp and US DRAM module maker Kingston Technology Corp are interested in forming a tie-up with Nanya Technology.

Nanya Technology plans to begin volume production of 20nm technology in 2017.

Based on Nanya Technology’s plan, half of its 60,000 wafer capacity will be upgraded to 20nm technology by licensing technology from Micron. The chipmaker now makes DRAM chips mostly on 30nm technology.

The company’s board also gave the go-ahead to distribute a cash dividend of NT$2 per share, after the company reported net income of NT$28.24 billion last year, or NT$11.77 per share.

The dividend payout represents 2.52 percent of dividend yield based on the stock’s closing price of NT$79.5 in Taipei trading yesterday.

Commenting on the global DRAM market outlook, Nanya Technology vice president Lee Pei-ing (李培瑛) said average selling prices of DRAM products would stabilize next quarter as demand gradually recovers from slow seasonal demand this quarter.

However, global PC demand is still weaker than expected for this quarter, which is likely to add extra pressure to the company’s average selling price, Lee said.

For the first two months of the year the company’s cumulative sales rose 0.37 percent year-on-year to NT$7.95 billion, according to data compiled by the Taiwan Stock Exchange.

Nanya shares rose 2.32 percent yesterday in Taipei trading, outpacing the broader market’s 0.76 percent increase.

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