Inotera expands output

MORE WAFERS: The Taiwanese-German joint venture is aiming for a production increase of 30,000 as its boss predicted a profitable period ahead for DRAM makers


Tue, Sep 12, 2006 - Page 11

Computer memory chipmaker Inotera Memories Inc (華亞科技) yesterday said it planned to double the capacity of a new factory to cope with surging demand, following the launch of Microsoft Corp's new operating system next year.

Inotera, a joint venture between Germany's Qimonda AG and Taiwan's Nanya Technology Corp (南亞科技), originally planned to churn out 30,000 wafers a month worth NT$49 billion (US$148.9 million) in the new plant in the first half of next year, but now it hopes to increase the production to 60,000 wafers for an additional NT$20 billion at least.

"The [market] situation is quite good recently, so we hope to double our capacity," Inotera president Charles Kau (高啟全) told reporters on the sideline of a press conference unveiling the annual semiconductor show in Taipei.

The capacity expansion plan is expected to get the go-ahead from the board members, who are scheduled to meet sometime this month, according to Kau.

Inotera is now making computer memory chips at a 12-inch factory in Taoyuan, with a maximum capacity of 62,000 wafers a month.

Kau said dynamic random access memory (DRAM) chipmakers are undergoing a period of migration to more advanced technologies, with which they would cut chips from 12-inch wafers rather than 8-inch ones.

"This change will bring supply troubles," Kau said, adding that the last transition brought three boom years for DRAM chipmakers between 1993 and 1995.

Besides, DRAM demand had risen by more than 40 percent at a compound annual rate, but the increase in new production was not matching that pace, Kau said.

The launch of Microsoft's Vista operating system early next year would compound the supply-and-demand problem, Kau said.

The shortage has prompted the price of DDR2 (double-data rate) chips, which are required to run Microsoft's new system, to jump nearly 30 percent over the past six months to US$6.50 per unit yesterday, according to Taipei-based market researcher DRAMeXchange.

Building on this optimism on the supply side, Kau expected the price would be more stable this and next year compared with the high volatility of the past.

"Demand and supply will reach parity next year, which will be a boon for DRAM makers to make respectable profits," said a Taipei-based market researcher DRAMeXchange analyst under the condition of anonymity.

Inotera shares rose 1.77 percent to NT$34.4 on the Taiwan Stock Exchange, outperforming the benchmark index's less than 1 percent gain yesterday.