Inotera breaks ground on US$2.2 billion chip plant

Taiwan's Inotera Memories has broken ground on a US$2.2 billion chip plant.

Inotera Memories, a computer memory chip maker based in Taiwan, has broken ground on a new semiconductor factory expected to cost at least US$2.2 billion (AU$2.93 billion).

"The factory should be finished by the end of next year," Amelia Chu, a company representative, said on Wednesday.

Inotera expects to spend US$900 million on plants and equipment this year, but it hasn't finalized a budget for 2006 yet, she said. The company is planning to publicly list its stock early next year to help pay for the new plant.

The factory is one of a new wave of semiconductor plants, called 300 millimeter wafer fabs, designed to dramatically increase the amount of chips produced each month.

The new plants etch semiconductors on silicon wafers the shape and size of dinner plates, 300mm around, which are larger than the 200mm wafers used in older factories. Thousands of Inotera's DRAM (dynamic-RAM) chips can be etched onto a single wafer. And despite their lofty price tags, the new 300mm factories are important in driving down the cost of mass-produced chips.

Inotera, which is a joint venture between Germany's Infineon Technologies AG and Taiwanese chip maker Nanya Technology, already has one 300mm running at full production.

Chu said output at the company's first factory has already reached 54,000 wafers per month, while the second factory will likely produce around 60,000 wafers per month.

The most expensive part of a new chip factory is the sensitive production line equipment, while the factory shells themselves make up only a fraction of the overall price. Companies normally take on debt to build the plants and spread payments over several years.

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