Nanya still plans to hike DRAM output despite mounting losses in 2001
Taiwan chip maker aims to overtake NEC-Hitachi joint venture as No. 5 supplier in 2002
Semiconductor Business News
(08/08/01 08:54 a.m. EST)
TAIPEI, Taiwan -- DRAM maker Nanya Technologies Corp. now expects to post a net loss of nearly $167 million in 2001 because of falling memory prices and the industry's downturn, but it isn't backing off its goal to move into the top five ranking of DRAM suppliers at the end of next year.
The company this week released a revised forecast for 2001, which shows its projected 2001 sales at half its original target. Nanya officials told investors and financial analysts that it now anticipates revenues being NT$15.9 billion ($456 million) instead of an original target of NT$30.5 billion ($882 million) at the start of the year due to sharply lower DRAM prices.
While the Taiwan company is making some adjustments in its plans, it is not making additional cuts in its investments or production plans, according to officials. The company is still planning NT$12 billion ($347 million) in capital spending to add capacity to its two existing 200-mm (8-inch) wafer fabs. It is also sticking with its plans to break ground on a new 300-mm wafer fab next March adjacent to the company's existing Fab 2 in Linkao, Taiwan.
"The additional investment this year will make our existing facilities more efficient, and that's the positive news for us because without increasing capital expenditures, we will take our total wafer starts from an original plan of 52,000 eight-inch equivalent starts per month to 59,000," said Ken Hurley, president of Nanya Technologies' North American subsidiary in San Jose.
"Our original plan at the beginning of the year was to produce 129 million 128-Mbit equivalent devices, and now our revised plan is to do 174 million in 2001," Hurley told SBN. "That increase is all because of manufacturing enhancements."
Nanya is also preparing to migrate its DRAM production to a next-generation process with 0.14-micron feature sizes from its existing 0.175-micron process. That new technology will be ramping into production in the first quarter of 2001, Hurley said.
The device shrinks and increases in production capacity in the two fabs will play a key role in Nanya's efforts to move up in the rankings of DRAM suppliers. At the end of 2000, the company was ranked No. 10 in DRAM market share with about 2.2% of worldwide sales. Estimates by Nanya and some analysts have the company growing to a 5.5% share in 2001, based on its current plans, which would move it up to No.7--close to being No. 6, according to Hurley.
"Next year, we are projecting 320 million 128-Mbit equivalent DRAMs out of the same two wafer fabs, but with a migration to the 0.14-micron process," he said in an interview on Tuesday. That increase is expected to move Nanya to fifth place in DRAM markets with 7.2% market share, behind Infineon, Hynix, Micron, and Samsung. "There is a significant gap between No. 4 and No. 5 [Infineon Technologies of Munich]," he added.
However, Nanya believes it is possible to pass up Elpida Memory Inc. -- the DRAM joint venture between NEC Corp. and Hitachi Ltd. According to a recent projection by Dataquest Inc., the Taiwan company will move into the No. 6 position in "high-density DRAMs"--which are 128- and 256-megabit products--and that would put it ahead of the Elpida venture in Japan, according to Hurley.
But Nanya, and other DRAM competitors, are still facing a difficult market. The Taiwan DRAM manufacturer on Monday announced an after-tax net loss of NT$3.8 billion ($11.0 million) on sales of NT$6.0 billion ($17.3 million) in the first six months of 2001.
"When compared to other DRAM manufacturers, our losses have not been a bad," Hurley said.
The problem facing DRAM makers is demand and falling average selling prices. Nanya now projects that average selling prices for 128-Mbit DRAMs will be half of what was expected at the start of this year. Its current forecast shows ASPs at $2.70 each vs. $6.20 each for 128-Mbit memories.
"We think there will be some strengthening in Q4, whether we call that a recovery now is premature," Hurley said. "But we are optimistic. We are going through a tough year because of conditions in the first half and probably Q3."
Nanya is still planning to start construction on its 300-mm fab in March with the facility moving into production at the end of 2003. Currently, the company is targeting 0.11-micron process technologies on the larger diameter wafers for 256- and 512-Mbit DRAMs.
The company also believes it has an advantage in the market's movement to higher performance double data rate (DDR) memories from today's mainstream synchronous DRAMs. "Our 128- and 256-Mbit devices are 'combo' die, which we believe gives us a competitive advantage. Very late in the manufacturing process, we determine whether these products will be SDRAM or DDR configurations," Hurley explained. "About two to three weeks before packaging them we can make that determination, which is somewhat unique."
--J. Robert Lineback reporting from the U.S. |
