Winbond Electronics Corp (華邦電), the world’s No. 3 NOR flash memorychip supplier, yesterday said it is to build a NT$335 billion (US$11.14 billion) fab in Taiwan to produce memory chips to meet robust customer demand, despite lingering power supply concerns.
Taiwanese manufacturers, including Winbond and Apple Inc’s local suppliers, were forced to disrupt production last month as a large-scale power outage hit the nation due to an incident at a major power plant in Taoyuan’s Datan Township (大潭).
Taiwan has repeatedly faced power rationing this summer.
The Hsinchu-based chipmaker has not invested in a new factory since 2004 amid a chronic see-saw over demand and oversupply in past years.
The memorychip market staged a comeback last year as demand outpaced supply, which led to an uptick in chip prices.
“As the company’s 12-inch fab in Taichung is approaching full utilization, Winbond has applied to the Southern Science Park administration for permission to build a new factory to meet business growth and to satisfy customer demand,” the administration said in a statement yesterday.
The park gave the green light to Winbond’s investment proposal aT a meeting yesterday.
The investment will create more than 1,000 jobs in Kaohsiung, the statement said.
To solve capacity constraints, Winbond said it plans to spend a record-high NT$17 billion primarily on new equipment this year.
The budget will help the chipmaker to boost its capacity from 44,000 wafers to 48,000 wafers a month during the quarter ending Dec. 31.
The chipmaker said its revenue has been capped by insufficient capacity.
Revenue from its memorychip businesses only increased 8 percent quarter-over-quarter last quarter to NT$8.94 billion, according to a company financial statement.
Its net profit skyrocketed 44 percent sequentially to NT$990 million.
“To seek next-stage growth stemming from the Internet of Things and emerging applications demand, Winbond has submitted an application to the science park administration to invest in a new factory in Taiwan,” Winbond said in a company statement.
As the investment is still subject to the approval of Winbond’s board of directors, it did not disclose details about the fab’s construction timeline and capacity plan.
Winbond shares surged to NT$24.6 yesterday.
At the beginning of the year the stock price stood at NT$10.05. The TAIEX rose 14.5 percent in the same period of time.
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