Here comes another Taiwan foundry
By Mark LaPedus
and Sandy Chen
TAIPEI, Taiwan -- A former executive of Taiwan's Mosel-Vitelic Inc.
and ProMos Technology Inc. has quietly formed a new chip company on
the island to enter the crowded IC-wafer foundry business by 2000.
The move represents at least the twelfth company to throw its hat in the highly-profitable but competitive wafer-foundry business in just the last year or two--a move that portends a price war--or a
shakeout--in the arena.
The latest concern to enter the foundry business is an entity called
Kuan Yuan Electronics Co. Ltd., which later this year hopes to break
ground on an 8-inch fab to process wafers with 0.25- to 0.18-micron
technology in the city of Chunan, near Hsinchu, according to local
sources familiar with the company's business plan.
Heading the new foundry company is Nasa Tsai, formerly president of
ProMos a joint 64-Mbit DRAM venture in Hsinchu between Mosel-Vitelic
and Germany's Siemens AG, sources said. Tsai, also a long-time
Mosel-Vitelic executive who resigned from ProMos last year, could
not reached for comment.
In order to help fund the company's costly fab project, sources said
that Tsai plans to raise nearly $1 billion in funding via bank loans
and an offering in the local stock market.
The foundry hopeful has also found its initial and lead investor,
Chunan-based Kuan Yuan Paper Manufacturing Co. Ltd., one of island's
largest paper concerns. A spokeswoman for Kuan Yuan Paper
acknowledged the paper company will invest in the new foundry
venture, but declined to elaborate.
Other Taiwan companies are also interested in investing in the new
foundry concern, including Taipei-based Delta Electronics Inc., the
island's largest power-supply maker, sources said. Delta officials
declined to comment.
Analysts said it's clear why companies are jumping or investing into
the foundry business at a frantic pace. The worldwide foundry
business will more than double over the next three years, from
$7.967 billion in 1998, to $15.46 billion in 2001, according to
Dataquest Inc. in San Jose.
At the same time, Hsinchu-based Taiwan Semiconductor Manufacturing
Co. (TSMC) Ltd., the world's largest foundry concern, and some of
its competitors, have reported huge profits despite a slowdown in
the worldwide IC business.
Still, there are some bad signs for even the mighty foundry
business. Many fabless IC design houses--the foundry company's best
customers--are reporting losses for various reasons. "Bookings are
lower in the foundry business right now, compared to the fourth
quarter of last year,'' said Donald Floyd, industry analyst with ING
Barings Taiwan Ltd. in Taipei.
Even more worrisome is that there's ton of new foundry capacity
coming online this year and next--a move that could ignite a price
war in the short-term, and in the longer-term, a possible shakeout.
The current average selling price (ASP) for an 8-inch wafer
processed with 0.35-micron technology from a Taiwan-based foundry
ranges from $1,500 to $2,000 each, said John Kuo, an analyst with
China Securities Investment Trust Corp. in Taipei. A leading-edge
8-inch wafer fabricated with 0.25-micron technology starts at about
$3,000, Floyd added. |
