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16Mbit dram could be $1.50 next year !
Larry Dudash
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Taiwan's Nan Ya enters foundry arena,
but continues selling DRAM products
By Mark LaPedus
TAIPEI, Taiwan -- The downturn in the memory market has prompted Taiwan DRAM start-up Nan Ya Technology Corp. to switch gears and enter the booming IC-wafer foundry business.
Nan Ya will continue to make and sell its core DRAM products, but it will also begin offering wafer foundry services for customers starting in the third quarter of next year, according to Charles Kau, executive vice president of the Taoyuan-based company.
''Starting from the third quarter of 1998, our capacity for foundry services will be 2,000 to 3,000 wafers per month, which is one-tenth of our total capacity,'' Kau said. ''In 1999, our foundry capacity will increase to 6,000 to 7,000 wafers a month.''
Presently, Nan Ya has an 8-inch fab capable of processing 30,000 wafers a month with 0.35-micron technology. The company currently makes 16-Mbit extended data out (EDO) DRAMs based on technology licensed from Japan's Oki back in 1994.
Kau insisted that Nan Ya has no plans to bail out of the DRAM business, but its move into the foundry business comes to no surprise among industry analysts.
Nan Ya itself shipped its first DRAMs in late 1996, but since that time, the overall market become a money-losing business for most memory suppliers.
Last week, the price for a 16-Mbit DRAM in Taiwan's spot market fell below $3.00, analysts said. The average cost to build a 16-Mbit DRAM among all Taiwan suppliers ranges from $4.50 to $5.00, they added.
At the same time, the wafer foundry business is booming, while vendors in this arena are showing gross margins as high as 50%. For example, Hsinchu-based Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), the world's largest, pure-play foundry company, this week revised its sales and profits upwards for 1997.
Other Taiwan DRAM makers are also looking into the foundry business, including Vanguard International Semiconductor Corp., based in Hsinchu. ''It's possible, but we're not going after foundry business right now,'' said Paul Chien, vice president of sales and marketing for Vanguard, a three-year-old DRAM startup.
It's clear why Taiwan's DRAM makers are looking for new opportunities. Prices for a 16-Mbit DRAM could fall as low as $1.50 next year, while the higher-margin, 64-Mbit parts will continue to be under pressure, according to many analysts. |
