NEC-Hitachi Memory Aims for DRAM Market Share of 20 Pct. by 2001, Pres. Says
March 2, 2000 (TOKYO) -- NEC-Hitachi Memory Inc. aims to take a worldwide market share of 20 percent and become the world's leading DRAM maker by 2001.
This is according to Kenji Tokuyama, president of NEC-Hitachi Memory, a DRAM joint venture company established by NEC Corp. and Hitachi Ltd. in December 1999.
The new company is expected to be able to take on overseas competitors as the only maker dedicated to manufacturing DRAM chips in Japan. Tokuyama discusses the company's strategy for survival in the DRAM business below.
Nikkei Microdevices: NEC-Hitachi Memory will start operations in April 2000. Please explain more about your goals.
Tokuyama: There are three. First, the company will develop leading-edge technologies. Second, it will increase competitiveness. And third, NEC-Hitachi Memory will raise its share in the worldwide DRAM market. As for the first target, the company will market the most advanced chips in the world at the earliest time to meet customers' needs using advanced technologies in processes and circuits.
Q: The company's membership in the alliance of the six leading semiconductor makers to develop next-generation DRAM technologies -- Intel Corp. of the United States, Hyundai Electronics Industries Co., Ltd. and Samsung Electronics Co., Ltd. of Korea, Micron Technology Inc. of the United States, NEC, and Infenon Technologies AG of Germany -- is likely to be an advantage to NEC-Hitachi Memory.
A: The alliance is not exclusive. NEC-Hitachi Memory will be able to market products specified by the alliance three months to six months earlier than companies that are not participating in the alliance.
Q: As for the competitiveness, what is planned?
A: NEC-Hitachi Memory will reduce chip size drastically to achieve the biggest cost reduction in the world. The company will be able to survive under any severe circumstances if it succeeds in materializing this target.
Q: Competitiveness is becoming more important because the oligopoly of the DRAM market is becoming increasingly prominent.
A: It is true that NEC's and Hitachi's market share, which marked a total of 17 percent in 1998, has been decreasing recently due to overseas makers' increases in production and other reasons. NEC-Hitachi Memory plans to boost its market share to 20 percent by 2001.
Q: What is the decisive factor to achieve that target?
A: It is technology to develop advanced chips. Japanese DRAM makers have been on the ebb against attacks from overseas makers, because they have weakened their strength in technology to develop advanced chips. There is no doubt that Japanese chip makers have decreased their strength to develop new chips relatively, as overseas makers have started making use of their abundant resources to offer diversified and high-speed chips. NEC-Hitachi Memory is determined to strengthen its power to develop advanced chips.
Q: What kinds of synergies are available in the field of product development?
A: NEC's technology for memory architecture and production, and Hitachi's technology for processes and packaging will be brought together as the best technologies to develop advanced chips.
Q: Describe the action plans.
A: The company will start developing a 256Mb DRAM chip and a 512Mb DRAM chip using a 0.13-micron design rule from April 2000. About 100 engineers will be mobilized each from NEC and Hitachi.
Q: Is a 0.15-micron design rule included in the technology to be developed jointly?
A: No, it is not included. NEC and Hitachi already have reached a certain level of that technology, independently. Shipments of 0.15-micron DRAM chips will be delayed if the new company takes over the development as of April 2000.
Q: How will you integrate production capabilities?
A: NEC-Hitachi Memory will mainly entrust its DRAM production to the NEC Hiroshima and Hitachi Nippon Steel Semiconductor Singapore (HNS) plants, starting from 2001. It is not adequate to unify processes of both production lines at this point using the same manufacturing equipment, because they have been constructed based on different concepts. So, the same masks will be used for both lines, for the time being, to make the performance of chips made by both lines coincide with each other. The final target is, of course, establishment of the company's own new production lines.
Q: When will the new lines be completed?
A: The year 2002 is a target. Until then, the company will continue improving operations and yields.
Q: No new line is needed until 2002?
A: NEC Hiroshima and HNS still have room. Both lines will come onstream in mid-2001. Therefore, the year 2002 is likely to be preferable for them. New lines will employ 300mm wafers.
Q: Is it probable that NEC-Hitachi Memory will introduce technology from the joint venture company established by Hitachi and United Microelectronics Corp. (UMC) of Taiwan for 300-mm wafers?
A: It is possible. The technology to process 300mm wafers needs quite a lot of development resources. If it is possible that NEC-Hitachi Memory makes use of the 300mm wafer technology developed by Hitachi and UMC in advance, then the company will be able to transfer its saved resources to other purposes.
Profile of Kenji Tokuyama: Joined NEC in April 1968; general manager of memory business unit in July 1997; president of NEC-Hitachi Memory since its start up in December 1999.
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