Taiwan's Powerchip opens 12-inch DRAM fab

Taiwan memory chipmaker Powerchip Semiconductor opened its first 12-inch

wafer fab and immediately announced plans to build a second plant, each of which

cost more than 42 billion.

"Powerchip will continue to invest in Taiwan, and complete plans to

build Fab 3," said company chairman Frank Huang. Powerchip is a

manufacturing partner of Japan's Mitsubishi Electric. The newly opened Fab 2

will enter mass production of 15,000 wafers per month by the end of 2002,

eventually hiking output to 30,000 wafers.

Despite efforts in China to develop a leading edge semiconductor industry,

Taiwan appears well ahead of mainland China with the recent series of 12-inch

wafer fabs. Taiwan's chip industry has the customer base, raw materials, and

engineering talent to continue to flourish as the world's leading manufacturer

of semiconductors. Half the world's 12-inch wafer fabs are now located in

Taiwan.

12-inch wafers yield more than twice as many chips per wafer as eight-inch

ones, saving production costs for chipmakers over the long run despite the $2

billion to $3 billion price tag to complete one of the facilities.

Taiwan Semiconductor Manufacturing Co chairman, Morris Chang, praised

Powerchip for sticking to investment plans as the global chip industry went

through its worst-ever downturn in 2001, when revenues shrank by more than 30

per cent. "This declares to the world that Taiwan is still a base for

semiconductor manufacturing, and Taiwan still has the will and determination to

make major hardware investments."

Dataquest estimates Powerchip will be the world's seventh-largest DRAM maker

in terms of bits of data with a 2.85 percent share of the total market, compared

with 20 percent or more for Micron and Samsung. Unlike Powerchip, Micron does

not have a 12-inch fab, while Samsung has just one 12-inch production line

housed in an 8-inch facility.