DJ NEC To Invest Y40 Billion To Increase DRAM Capacity
Dow Jones Newswires
TOKYO -- NEC Corp. (NIPNY or 6701) said Wednesday it would invest around Y40 billion to increase production capacity, mainly for dynamic random access memory chips, at existing semiconductor plants in the U.K. and in Japan.
The new capacity will lead to an increase in monthly DRAM production to the equivalent of 30 million 64-megabit DRAM chips per month from around 12 million units per month now, NEC said.
Investment will be at NEC Semiconductors U.K., a subsidiary of NEC in the U.K., and at plants in Hiroshima and Kyushu in Japan.
NEC said that the investment would enable it to benefit from economies of scale and produce more advanced DRAMs, including 128-megabit DRAMs and Direct Rambus DRAMs.
"The whole point is to produce as much a value-added product as possible," an NEC spokesman said.
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NEC Plans to Boost
Output of DRAM Chips
An INTERACTIVE JOURNAL News Roundup
TOKYO -- NEC Corp. said Wednesday it will invest around 40 billion yen ($327.2 million) to increase production capacity.
The Japanese electronics giant said it will spend most of the money on boosting output of dynamic-random-access-memory chips at existing semiconductor plants in Japan and the United Kingdom.
NEC said the investment will result in the production of 30 million 64-megabit DRAM chips per month, up 150% from the current level of around 12 million chips per month.
DRAM technology, a dense type of memory, is widely used in the personal-computer industry.
The company added that the investment will enable it to benefit from economies of scale, and produce more advanced DRAM chips, including 128-megabit DRAMs and Direct Rambus DRAMs.
NEC's plants in Hiroshima and Kyushu and NEC Semiconductors U.K., a British subsidiary, will receive most of the funding.
NEC's stock closed down 2.49%, or 34 yen, at 1,331 yen on the Tokyo Stock Exchange Thursday. Traders said news of the increase in production made investors worry about a possible glut in the market for DRAM chips, a market that has faced considerable pricing pressure in recent years.
Chip makers took a pounding in 1998 as DRAM prices plunged amid a global supply glut. And even though prices have risen in recent months, concerns remain about the sustainability of these prices, analysts say. |
