Winbond pulls designers out of Toshiba on word of DRAM divestiture
300mm-wafer fab placed on hold
By Faith Hung
EBN
(08/29/01 11:44 a.m. EST)
HSINCHU, Taiwan -- Amid reports that Toshiba Corp. is planning to sell its DRAM business, Winbond Electronics Corp. has withdrawn its technical team from Toshiba's lab and put plans for a 300mm-wafer fab on hold.
The move by Winbond, which licenses process technologies from Toshiba, comes days after Toshiba reportedly opened talks to sell its DRAM unit to major players such as Samsung Electronics Co. Ltd. and Infineon Technologies AG.
While Toshiba and its partners are “negotiating a new collaboration model and process technology strategy,” Winbond is making the alteration to its original development plan with the Japanese company, according to a statement released by Winbond, Hsinchu, Taiwan.
In addition, Winbond is putting the construction schedule and other details of a $3.5 billion 300mm-wafer fab on hold until a re-negotiation with Toshiba and other partners is completed. To build the fab, Winbond has leased a piece of land in the Hsinchu Science-based Industrial Park, effective from the first half of next year.
“We believe our long-term relationship with Toshiba will carry on” no matter what Toshiba decides to do with its DRAM operation, said Hander Chang, an assistant vice president of Winbond.
Some analysts took a more negative view, raising concerns that Winbond would lose its ability to license next-generation technologies.
“The most significant effect would be once Toshiba sells its DRAM business, Winbond will be in a tough situation since it has no ability to develop new technologies on its own and it's very expensive to license from somebody else,” said Barro Liou, an analyst with Prudential Securities Investment Trust & Co., Taipei.
The situation with Wibond could be just the beginning of a serious problem for Taiwan's DRAM industry, as its makers depend heavily on foreign partners for technology transfers. “None of the Taiwan players is sophisticated enough to have their own design capabilities,” Liou said.
Powerchip Semiconductor Corp., for example, uses process technologies from Mitsubishi Electric Corp., ProMos Technologies gets technology from Infineon, and Nanya Technology from IBM Corp. Vanguard International Semiconductor Co. -- a unit of chip foundry giant Taiwan Semiconductor Manufacturing Co. Ltd. -- also relies on Mitsubishi for its technology.
Winbond should also brace for a sales decline, because half of its DRAM output is shipped to Toshiba, analysts said.
“Winbond has to look for new customers for its DRAM product,” which account for 50% of its total sales, said Alfred Yin, head of research at BNP Paribas Peregrine Securities in Hong Kong.
Before Winbond's technical team was recalled, it was working on the development of 0.11-micron process technology in Yokohama, Japan with Toshiba, analysts said. Now, the 50-engineer team will focus on 0.13-micron DRAM and flash memories technologies at Winbond's lab in Hsinchu, the company said in a statement.
Like its rivals in the DRAM market, Toshiba has suffered losses due to a collapse in DRAM prices and weak demand worldwide.
Toshiba is reportedly in talks with several large chipmakers to sell its DRAM business. The Japanese maker said earlier this week that it would post a larger-than-expected loss of $958 million in the year to March 2002 and cut 10% of its workforce.
Sources in the memory industry indicated that Samsung is only interested in picking up selected portions of Toshiba's DRAM business, including some key customers, especially for Direct Rambus chips.
They felt it was highly unlikely Samsung would take over all of Toshiba's DRAM operations, because Samsung has an entirelydifferent stacked capacitor DRAM architecture which isn't compatible in manufacturing with Toshiba's trench capacitor DRAMs.
However, the sources said Toshiba had a DRAM business strategy of focusing on selected high-volume customer accounts. Samsung would be interested in picking up this customer base, especially for Direct RDRAMs. One key RDRAM customer is Sony Corp., which now splits its order between Samsung and Toshiba.
Officials of Samsung Semiconductor Inc., the San Jose, Calif.-based subsidiary, referred all questions on any discussions with Toshiba to the firm's Seoul headquarters.
Tom Quinn, Samsung Semiconductor senior vice president of marketing, did comment that the indications from Toshiba that it was looking to sell off part or all of its DRAM business "indicates the seriousness of the current market downturn." No matter what develops in the Toshiba matter, Quinn expected the global DRAM market to go through widescale consolidation in the near future.
As previously reported, Infineon Technologies AG confirmed Toshiba had contacted the German firm "to discuss ways to cooperate in the DRAM area." A spokesman declined to comment on reports the two memory chip makers might be discussing combining their DRAM operations in a new joint venture.
Sources said such a combine makes far more sense than any Toshiba linkage with Samsung, since both the Japanese firm and Infineon use the same DRAM trench capacitor architecture.
Additional reporting by Jack Robertson |
