ProMOS raises memory plant spending

ProMOS spending $1.5 billion on new memory chip plants this year should help keep DRAM prices down

ProMOS Technologies raised its projected spending on new memory chip plants this year, to between $1.5 billion and $1.6 billion, in a bid to keep up with rivals in Taiwan.

Robust competition among memory chip makers such as ProMOS and its rivals in Taiwan, Inotera Memories, Powerchip Semiconductor, and Nanya Technology, is causing them to build new memory chip factories at a breakneck pace. The new figure from ProMOS is 28 percent higher than its former spending plan for 2007, $1.25 billion.

Such competition is good news for users because it should help keep DRAM (dynamic RAM) prices down. Most DRAM makers believe prices for the chips will rise in the second half of this year as demand for new PCs armed with the Windows Vista OS take off. But a number of new DRAM factories are scheduled to come on line or raise production as the year rolls on, which could limit price increases.

ProMOS company will also move equipment into its first ever China chip plant by the end of this year, according to Ben Tseng, a vice president at ProMOS. The $365 million factory is being built in Chongqing, a city located in southwestern China. The company plans to start production at the site early next year.

ProMOS is one of the last major DRAM makers to announce its spending plans for this year.

Last week, rival Inotera revealed plans to build two advanced memory chip factories in northern Taiwan in an investment estimated at more than NT$200 billion, (US$6 billion). Its spending this year is forecast at NT$48 billion, up from NT$40 billion last year.

In addition, Powerchip last year announced a major new spending plan with partner Elpida Memories of Japan. The two companies will jointly invest US$13.9 billion over five years to build four new DRAM factories in Taiwan. The joint venture company, named Rexchip Electronics, is slated to open this year in an advanced 12-inch chip factory Powerchip started building in central Taiwan earlier in 2006.

Copyright © 2007 IDG Communications, Inc.