Inotera plans $6B in new chip plant spending

Investment should help ensure a steady supply of cheap memory chips

Inotera Memories plans to build two advanced memory chip factories in northern Taiwan in an investment estimated at more than NT$200 billion, (US$6 billion), the company confirmed Tuesday.

The memory chip maker, a joint-venture started a few years ago by Taiwan's Nanya Technology and Germany's Infineon Technologies, revealed the investment in an application to the Taoyuan County government asking to buy 16.7 hectares of land in an industrial park in the county. The Taoyuan County government announced the purchase on its Web site Monday.

The investments should help ensure a steady supply of cheap memory chips for users. Microsoft's new Vista OS demands more DRAM per PC than older OSes, and DRAM prices rose at the end of last year as companies stock-piled the chips in anticipation of the launch of the consumer edition of the OS. Although DRAM prices have since fallen, there have been fears that a surge in demand for new Vista-ready PCs could send them up again.

Several large new memory chip factories will start production this year, and investment applications such as Inotera's indicate that companies remain confident there will be steady demand for DRAM chips over the next few years.

Inotera already operates one 12-inch (300-millimeter) wafer factory in Taiwan, and another is slated to start running in the second half of this year. The land to be purchased in Taoyuan would be for the company's third and fourth 12-inch plants. Inotera did not say when it would begin building the new factories.