Taiwan's DRAM makers to expand operations for 2004

Dec 23, 2003 Ι Industry In-Focus Ι Electronics and Computers Ι By Judy, CENS
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Taipei, Dec. 23, 2003 (CENS)--With the increasing application of 0.11-micron process technology to the12-inch wafers, Taiwan's leading dynamic random access memory (DRAM) makers, including Nanya Technology Corp., Powerchip Semiconductor Corp. and ProMos Technologies Inc., have been actively expanding the production of 12-inch wafers.

To meet the expansion of their operations, Nanya and Powerchip intend to each spend next year some NT$20 billion (US$588.24 million at US$1 = NT$34) for the purchase of facilities or the construction of 12-inch wafer foundries. Compared to this year, the capital spending of the former for 2004 will shoot up104% and the latter 50%. As for ProMos, it will allocate a budget of NT$10.5 billion (US$310 million) for the expansion of its 12-inch wafer plant next year, up 72% from this year.

To meet the massive capital demand, Nanya plans to issue exchangeable corporate bonds (ECBs) and global depository receipts (GDRs) in the first and third quarters of next year to raise a total capital of NT$18 billion (US$529.4 million). Powerchip will float ECBs and GDRs in the first half of 2004 in addition to a syndicated loan of NT$6 billion (US$176.5 million) slated for the end of this year. And ProMos has recently been approved to issue ECBs and GDRs, with the maximum value equivalent to 600 million shares of the firm.

Currently the non-defect rate of Powerchip's 12-inch wafer plant A has been boosted to 90% and the plant's monthly output is about 15,000 pieces of wafers, which are expected to grow to 22,000 pieces in February of 2004 and 30,000 pieces by the end of next year. The company's 8-inch wafer plant, with a monthly output of 36,000 pieces, will be transformed to be a contract plant by the end of 2004 to turn out only contract chips.

Powerchip's projected capital spending of NT$20 billion (US$588.24 million) for 2004 will be mainly for the expansion of its 12-inch wafer plant A and the establishment of its 12-inch plant B. In 2003, the company's overall production equals to a total of 175 million 256Mb chips, and the volume is estimated to double in 2004. Insiders indicated that the company's general cost for next year's operations might drop 15%-20% and the price of its DRAM chips should be below US$3 per piece.

The capital spending of ProMos is around US$180 million this year; of which, US$125 million goes to its 12-inch wafer plant A, and US$50 million to 8-inch wafer plant. In the same year the company's 12-inch wafer plant B gets a tiny piece of US$10 million. Next year ProMos plans to spend US$310 million to enhance its facilities, and the projected fund will be respectively allocated to 12-inch plant A, plant B and 8-inch plant at US$170 million, US$90 million, and US$50 million.

Currently ProMos turns out 13,000 wafers per month at its 12-inch plant A and the volume is predicted to soar to 18,000 pieces next year with non-defect rate of up 85%. Insiders disclosed that the company's output this year is equivalent to 217 million 256Mb chips, which is expected to balloon to 287 million chips in 2004.

Capital spending of Taiwan's three leading DRAM makers (2003 & 2004)





NT$10 B.

Nanya: NT$8.2 B.

Inotera Memories Corp.: NT$12.2 B.


NT$12-15 B.

NT$20 B.


US$180 M.

US$310 M.

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