ProMOS Technologies Inc (茂德科技), the nation’s third-largest maker of computer memory chips, plans to shut down one plant by early next year, causing an output reduction of up to 15 percent this quarter, a company executive said yesterday.
Computer memory chip suppliers, including the world’s second-largest, Hynix Semiconductor Inc, and local Powerchip Semiconductor Corp (力晶半導體), have taken steps to end sharp drops in chip prices driven by overcapacity.
“We are preparing to shut down an 8-inch factory,” ProMOS spokesman Ben Tseng (曾邦助) said by telephone. “The closure is set to be complete in February next year.”
ProMOS already halved the output from the plant to around 20,000 8-inch wafers from 40,000 wafers previously. Half of the output is used in computers and half of it is used in consumer electronic devices, the company said.
“The adjustment, beginning in October, aims to reduce costs amid a persistent slowdown in the dynamic random access memory (DRAM) market,” Tseng said in a statement. “ProMOS hopes to ride out the industrial trough via the adjustment.”
Output is expected to drop by between 10 percent and 15 percent in the fourth quarter from the third quarter, the company statement said.
After closing the 8-inch plant, ProMOS will have three plants in operation and have all of its chips made at the cost-saving 12-inch plants.
Yesterday, Powerchip said it was on track to cut between 10 percent and 15 percent in DRAM output this quarter as planned to ease a severe glut after chip prices slid below costs recently.
The spot price for the benchmark DRAM chips declined to US$1.19 per unit yesterday — a drop of more than 30 percent since the beginning of the year — after plunging 85 percent last year, Taipei-based market researcher DRAMeXchange Technology Inc (集邦科技) said.
Both Powerchip and ProMOS yesterday blamed the constant price drops for lower sales last month. Powerchip sales dropped by 17 percent year-on-year to NT$3.82 billion last month, while ProMOS dropped 24 percent to NT$2.66 billion.
DRAMeXchange said on Wednesday that DRAM makers are still not out of the woods as the wide-spread economic slowdown threatens PC sales and that excessive inventories in PC maker’s storage has sent contract chip price down 15.6 percent in the second half of last month from the first half.
“Generally speaking, output reduction is still unable to offset the chilly market conditions,” DRAMeXchange said in the statement, calling on more players to join the production reduction.
ProMOS shares jumped 4.31 percent to NT$3.39 yesterday after the output reduction was announced.
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