Memorychip maker Winbond Electronics Corp (華邦電) is to break ground today on a NT$335 billion (US$10.92 billion) fab in a rare capacity expansion, marking the Southern Taiwan Science Park’s (南部科學工業園) biggest-ever investment.
The investment is also the largest made by Winbond since 2004, as the Hsinchu-based firm is cautious about boosting capacity due to the industry’s vulnerability to supply-demand dynamics.
“The investment is the largest scale in the history of the park in Kaohsiung’s Lujhu District (路竹), surpassing all capital that has been invested over the past 15 years,” the Kaohsiung Economic Development Bureau said in a statement on Monday.
The 12-inch fab is slated to start producing DRAM and flash memory chips after construction finishes in 2020, the statement said, adding that it would create at least 2,500 jobs.
Winbond chose Taiwan over Singapore for the fab, as the city government and the Ministry of Science and Technology last year located a piece of land and fast-tracked approval, Acting Kaohsiung Mayor Hsu Li-ming (許立明) said in the statement.
Prior to Winbond’s addition, the park had attracted investment totaling NT$37.5 billion, Hsu said.
Winbond’s board of directors in August approved an initial investment of NT$20.37 billion in the fab to support the firm’s long-term growth, the company said, adding that installed capacity is to be 285,000 per month.
Winbond said its revenue growth in the first half of this year was limited by inadequate capacity, as its factory utilization rate is close to 100 percent and would continue to run at full capacity in the second half.
Semiconductor firms in Kaohsiung last year generated NT$500 billion in production value, accounting for 20 percent of the nation’s total semiconductor production value, Hsu said, citing unspecified statistics.
The contribution from Kaohsiung should increase as a growing number of integrated circuit component suppliers, foundry companies and chip testing and packaging companies have requested land to build fabs in the municipality, he said.
Winbond shares rallied 1.7 percent to NT$14.95 yesterday in Taipei trading.
China’s chip industry is growing faster than anywhere else in the world, after US sanctions on local champions — from Huawei Technologies Co (華為) to Hikvision Digital Technology Co (海康威視) — spurred appetite for homegrown components. Nineteen of the world’s 20 fastest-growing chip industry firms over the past four quarters, on average, hail from the world’s No. 2 economy, data compiled by Bloomberg showed. That compared with just eight firms at the same point last year. Revenue at China-based suppliers of design software, processors and gear vital to chipmaking is increasing at several times the pace of global leaders Taiwan Semiconductor Manufacturing Co
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