NEC Electronics Corp, the world's largest maker of semiconductors for cellphone screens, will use its own cash to fund additional chipmaking capacity that may cost more than ?100 billion (US$940 million).
"We have ?200 billion in cash so we can afford to build" without additional funds, Hiroshi Sato, senior vice president and chief financial officer of the Kanagawa prefecture-based company said in an interview.
NEC Electronics beat Tokyo-based Renesas Technology Corp and Shanghai-based Grace Semiconductor Manufacturing Corp (中芯國際集成電路) to public share sales, raising ?98 billion to fund expansion.
That initial share sale gave NEC Electronics the cash needed to give it more control over growth than its two rivals, neither of which have sold shares of their own to investors, said Yukihiko Shimada, an analyst at UFJ Tsubasa Securities Co in Tokyo.
On Monday, NEC Electronics said that it would add a factory to meet demand for its chips used in DVD recorders, cellphones and automobiles.
Monthly capacity of silicon wafers with a diameter of 300mm, from which the chips are produced, will be increased to 14,000 units from 4,000.
The chipmaker did not disclose the total cost of the production facility, which would include chipmaking equipment and clean rooms in which chips must be handled.
"With 300mm wafer factories, it costs more than ?10 billion for each 1,000 wafers produced a month," Sato said.
NEC Electronics will fill the new building with equipment gradually, he said.
"Seventy percent of our chip products are made-to-order system chips for big customers such as Toyota Motor Corp, Delphi Corp and Nokia Oyj, so we can predict chip demand fairly accurately," Sato said.
Given the projected expansion rate, the new production facility could eventually cost more than ?100 billion. NEC Electronics said on Monday that it will spend ?5 billion on a new building to house the increased production capacity.
Chipmaking equipment and clean rooms needed to handle the chips will form much of the extra costs.
The ?98 billion raised when the company made its initial share sale last July, coupled with profitability in the business year ended last month meant that "we are still cash rich," Sato said.
The company said in January it will post net income of ?26 billion in the fiscal year to last month, up from ?9.6 billion a year earlier.
The company will provide details of the new factory on April 27 when it reports earnings for its business year ending March 31, Sato said.
Sales by NEC Electronics grew 11 percent to US$6.3 billion last year, winning it a market share of 3.6 percent and a ranking as the world's eighth-biggest chipmaker, according to Gartner Dataquest.
NEC Electronics says it is the biggest maker of semiconductors for DVD recorders, and supplies makers of personal computers that have DVD functions and consumer electronics makers.
It predicts the DVD recorder market will grow from 4 million units in the last fiscal year to 20 million units by next March.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique