Elpida Memory Inc, Japan’s largest maker of computer memory chips, will increase its capital spending plans by 20 percent this year, defying an industry glut that drove down prices below the cost of production.
Elpida, which reported a third straight quarterly loss yesterday, said it would invest ¥120 billion (US$1.1 billion) on upgrading production capacity in the year ending next March, an increase from the ¥100 billion announced in April.
Tokyo-based Elpida is the only chipmaker among the industry’s five biggest computer memory producers to step up spending plans at a time when a glut forced Hynix Semiconductor Inc and Powerchip Semiconductor Corp (力晶半導體) to scale back investment this year.
Elpida agreed on Wednesday to partner with China’s Suzhou Venture Group Co (蘇州創投) to form a venture for a chip factory that may cost US$5 billion.
“It’s our policy to be aggressive when the market is weak,” Takao Adachi, co-chief technology officer at Elpida, said at a news briefing in Tokyo yesterday.
Hynix said last month it will close its manufacturing plant in the US because of lower chip prices. Powerchip and Nanya Technology Corp (南亞科技), Taiwan’s biggest makers of computer memory chips, said they will reduce their capital spending budgets for this year. Hynix, Powerchip and Nanya all reported losses for the latest quarter.
Elpida had a net loss of ¥13.8 billion during the fiscal first quarter ended June 30, compared with a profit of ¥14.6 billion a year earlier. The loss compares with a projected deficit of ¥13.2 billion, based on the median of five analyst estimates compiled by Bloomberg.
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