Nanya plans US$1.5 billion chip plant investment

Taiwanese DRAM maker Nanya Technology plans to invest up to US$1.5 billion in a new chip factory.

Taiwanese memory chipmaker, Nanya Technology, plans to break ground on its first advanced 300mm (12-inch) chip factory in the first quarter of next year, with an initial investment of between NT$40 billion ($US1.2 billion) and NT$50 billion.

"We'll finish the shell of the factory next year and plan to be in production by the middle of 2007," a vice-president at Nanya Technology, Pei-Lin Pai, said. The investment represents just the first phase of the plant, aimed at bringing it to output levels of 24,000 silicon wafers per month. Semiconductors are made on 300mm round silicon wafers, and hundreds or thousands of chips can be made on one wafer depending on the make of the chip.

In Nanya's business, dynamic RAM (DRAM) for example, a few thousand chips can be made on each 300mm wafer. The expensive new 300mm plants are replacing older 200mm chip factories because the larger wafer size is important in driving down the cost of mass-produced chips.

An analyst at ABN AMRO Asia, said the new plant could impact the DRAM market when it comes online in 2007.

ABN AMRO expects a DRAM glut next year, but a rebound in 2007 as a shortage of the chips causes prices to rise. Nanya's new plant could play a part in alleviating the shortage.

The company plans to use 70-nanometer chip etching technology in the new plant, far finer than the 90-nanometer technology currently in use at most DRAM factories. Chip production technology refers to nanometers to describe the size of the smallest feature that can be created on a chip. Producers strive to shrink the size in order to make the chips themselves more powerful as well as smaller, because if the chips are smaller then more can be made on one silicon wafer, lowering costs.

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