Micron Tech Plans to Spend More in Singapore
Bloomberg News
October 13, 1998, 4:55 a.m. PT
Singapore, Oct. 13 (Bloomberg) -- Boise, Idaho-based Micron
Technology Inc. plans to spend at least $300 million in the next
two years to bring updated semiconductor technology to a
Singapore test-and-assembly plant it acquired from Dallas-based
Texas Instruments Inc. (TI).
Micron will also spend $200 million in the next two years in
a venture, Tech Semiconductor Singapore Pte., to make advanced
silicon wafers that are cut into computer memory chips. Micron
bought TI's 30-percent stake in Tech last month.
''We plan to change all the products'' made here to meet
demand for higher-memory products from personal computer makers,
said Steven R. Appleton, chairman and chief executive of Micron.
The investments come at a time when Singapore's electronics
industry, which is the key to an export recovery, is struggling
to draw investments. The island state's economy is expected to
post a growth of as little as 0.5 percent this year, according to
the government. The economy grew 7.8 percent last year.
Earlier this month, Micron completed the purchase of TI's
unprofitable computer memory-chip business for $881 million in
stock, and received $550 million from TI to refurbish the chip
plants, which aren't as advanced as Micron's.
The purchase eased TI out of a difficult business to focus
on its profitable digital chip-making business for
communications, while allowing Micron to buy assets at cheap
prices and strengthen its leadership in the computer memory
business.
This year, aided by the purchase, Micron pipped South
Korea's Samsung Electronics to become ''the largest producer in
the world'' of memory chips, Appleton said.
He said the business requires ''continued investment'' on a
3 1/2-year basis to stave off competition as technology changes
swiftly. In the last decade, South Korean manufacturers became a
powerful force in the memory chip market. Their momentum, though,
has been braked by financing problems amid Asia's banking crisis.
The financing difficulties at Samsung, Hyundai Electronics
Industries and LG Electronics ''are getting worse, not better,''
he said. ''They are unable to borrow the money. They are not
aggressive anymore.''
Losses
Still, Micron will bear the losses at the memory business it
bought from TI for ''a couple of quarters.'' The losses will
reduce Micron's earnings by 25 cents a share, or $50 million, a
quarter, he said. In the second quarter, TI had operating losses
of $222 million in its memory business.
Micron has renamed its Singapore test and assembly facility
to Micron Semiconductor Asia Pte. Tech won't be renamed.
Tech was making 16-megabit dynamic random access memory (D-
ram) chips using 0.25 micron lithography. Micron is upgrading the
equipment to make 64-megabit, and then 128-megabit D-Ram chips
using finer 0.18 micron lithography. This means Micron's chips
would have denser circuitry with at least four times as much
memory, and fetch at least four times the price, he said.
''We expect output to go by 40 percent'' by the time the
product changeover is complete, Appleton said. The first new
wafers will be made by March at Tech. Full commercial production
comes several months after, depending on quality tests.
The subsequent chips will be tested at the 2,000-strong test
and assembly plant, and sold globally. |
