Chipmakers set to boost output
Korean semiconductor makers plan to increase memory chip production in the second half of the year as the supply shortage is expected to continue to worsen.
Samsung Electronics and Hyundai Electronics Industries are boosting investment in more production lines and higher output efficiency for their flagship product, dynamic random access memory (DRAM). The chips are used as main memory for personal computers.
Though summer is a low-demand season for the chips, global demand is currently higher than supply. The shortage will be aggravated in the latter half of the year as the peak season for computer sales approaches.
Samsung, currently running nine production lines, plans to put the 10th line, with a capacity of 16,000 wafers, into operation in October. Wafer is silicon plate used as base material for chips.
Hyundai also plans to add 20,000 new wafers to its plant in Chongju, North Chungchong Province, which is scheduled to enter a full operation in the last quarter of the year.
The companies are also upping the ante to boost production efficiency, which depends on the level of precision of chip circuitry technology.
Samsung is in full swing in research efforts to reduce current 0.20-0.22 micron circuit processing to 0.17-0.19 micron by the end of the year. One micron equals a millionth of a meter.
The company has breached a major barrier last month by developing the world's first 0.11-micron technology, which is expected to speed up the commercialization of gigabit-class devices as mainstream in the memory chip market.
Hyundai also plans to apply 0.18 micron technology to 70 percent of its production lines, up from the current 30 percent.
The technology advances will lead to a major boost in production capacity. By the end of the year Samsung will be able to produce 75 million 64M DRAM chips per month up from 61 million now. Hyundai's monthly capacity will also increase from 66 million to 80 million units.
Spot prices for 64M DRAM have stayed in the $8 range in the weak-demand season while production costs are falling, leading to the prospect of unprecedented performance by the two leading memory chip producers.
Combined DRAM sales of Samsung and Hyundai in the first half of this year are estimated to be $5 billion, up 30 percent from the same period last year.
Industry sources expect the two companies to post record-high sales of $12 billion this year.
Prices for 64M DRAM fell to the 5-dollar range in March at one point but recovered to the 8-dollar range in mid-June, and have not changed much since then. At the end of this year, the 64M DRAM price is expected to reach $10-12, the same level as at the end of last year, or even higher.
Local semiconductor makers are also enjoying favorable conditions thanks to reduced production costs. Per unit production costs for 64M DRAM fell 30 percent from a year earlier to $3-4 at present.
The cost has fallen because while the depreciation of equipment bought since 1997 has almost finished, productivity has been heightened after technical advances reduced chip sizes.
Samsung said depreciation in eight out of 10 production lines has finished and the company is at a similar level with Japan or the United States in cost competitiveness and profitability.
Hyundai also said the company expects to stay profitable through next year at least due to decreased production costs, as long as international spot prices hold steady. (HJJ)
Updated: 08/17/2000
koreaherald.co.kr |
