ProMos seeking tech link with Hynix

By Lisa Wang

ProMOS Technologies (­Z¼w¬ì§Þ), the nation's No. 3 computer-memory chipmaker, said yesterday that it wants to enhance competitiveness by constructing a new 12-inch wafer factory with technological support possibly from Hynix Semicon-ductor Inc.

The company plans to pour approximately US$3.2 billion into the new 12-inch plant, which is set to start mass production late next year, ProMOS president Chen Min-liang (³¯¥Á¨}) told reporters in Taichung during a groundbreaking ceremony.

"The move aims to maintain our cost competitiveness when the dynamic random access memory [DRAM] chip sector in its trough. And Hynix will be our strategic partner," Chen said.

The 12-inch wafers allow more chips to be produced on each piece of silicon than standard 8-inch wafers, reducing production costs.

In general, an advanced 12-inch plant will save about 30 percent in costs for chipmakers.

The new plant, ProMOS' second 12-inch wafer plant, will be located in the Central Taiwan Science Park (¤¤³¡¬ì¾Ç¶é°Ï) in Taichung.

It will be able to churn out 50,000 units a month when the capacity is fully utilized, Chen said.

After severing its partnership with Germany Infineon Technologies AG, the Taiwanese DRAM maker now is in talks with Hynix Semiconductor of South Korea for technological transfer.

Hynix, the world's No.4 DRAM supplier, hopes the talks will soon be concluded, a company official told the Taipei Times yesterday on the sidelines of the groundbreaking ceremony.

"We hope we can wrap up the negotiations within the next one to two months," said Hynix chairman and chief executive officer E. J. Woo.

He declined, however, to discuss the details of the talks.

The collaboration with Hynix may boost the stock price of ProMOS in the short term, but there is no guarantee that the local chipmaker will get the much-needed advanced technologies, said George Wu (§d¸Î¨}), an analyst with Primasia Securities Co in Taipei.

"Without any 12-inch factory [of its own], Hynix is fumbling about with cutting-edge technologies," Wu said.

"And I doubt the [South] Korean DRAM maker can afford the research expenditures, when it is trying hard to sell its non-core operations," he said.

ProMOS is also considering trying to improve its profitability by moving its less advanced 8-inch production to China.

Chen said the company plans to file an application with the government sometime next month or June for approval to move the old 8-inch equipment to China.

Shanghai will be high on the company's short list, ProMOS spokesman Albert Lin (ªL¨|¤¤) said.

The Chinese factory is expected to produce niche memory chips by late 2006 at the earliest, if everything goes smoothly, Lin said.

As local chipmakers are only allowed to produce chips using less advanced 0.25-micron processing technologies in Chinese plants, it will be a major hurdle for ProMOS to jump before getting the nod to move its 8-inch fab to China, Wu said.

ProMOS uses 0.14-micron processing technology to manufacture chips in its 8-inch factory.

"I hold a neutral view about the plant relocation because it doesn't save local companies much money when they run a Chinese factory," said Liu Szu-liang (¼B«ä¨}), a DRAM analyst with Yuanta Core Pacific Capital Management (¤¸¤j¨ÊµØ§ëÅU).

"Only if ProMOS can grab new orders from Chinese-based companies will its [relocation] plan pay off," Liu said.

In related news, ProMOS yesterday reported sales of around NT$3.52 billion last month, a 10 percent increase over the previous month and an increase of 141.1 percent from the same period a year earlier.

From: http://www.taipeitimes.com/News/biz/archives/2004/04/09/2003135978