Taiwan’s Powerchip raises spending on DRAM plant

Powerchip Semiconductor Corp., Taiwan’s second largest DRAM (dynamic RAM) maker by revenue, has raised its target on new plant spending for 2005 to NT$50 billion (US$1.6 billion) this year, up from NT$40 billion previously, a company executive said Tuesday.

The revised capital spending figure shows DRAM companies continue to spend on new production lines this year despite a global chip glut that has reduced earnings for many companies. That bodes well for computer users because ample production capacity should help keep prices down.

“We’re trying to speed up time to production at our new [300-millimeter] plant,” said Eric Tang, a vice president at Powerchip. The term 300-millimeter refers to the size of silicon wafers used in the production process, which are larger than mainstream 8-inch wafers. Thousands of chips can be produced on a single silicon wafer.

Powerchip isn’t the only company spending more money on chipmaking equipment. Global spending on new chip equipment rose slightly to US$9.35 billion in the first three months of this year, up 2.3 per cent from the same time last year and 6.5 per cent better than the fourth quarter last year, according to Semiconductor Materials and Equipment International (SEMI), a global trade group for chip tool makers. However, new orders fell sharply from last year to US$7.25 billion, down 21 percent compared to the same time last year, SEMI said, indicating that companies have become more cautious on new spending.

Powerchip’s new 300-millimeter plant in test production right now. The new plant is expected to be in mass production of 15,000 wafers per month by the end of June, Tang said, with total output of 30,000 wafers by the end of the year.

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