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More Taiwanese chip makers slash spending

Three more Taiwanese chip makers plan to spend significantly less money on new factories and equipment this year as a DRAM (dynamic RAM) glut and uncertainty about the global economy weigh. Lower capital spending forecasts in the chip industry are a sign the global IT industry is on edge about future demand. Analysts have expected DRAM makers to cut back on spending for a long time due to falling chip prices. Prices for mainstream DDR2 (double data rate, second generation) chips remain below production costs, and most DRAM makers have reported losses for the fourth quarter.

Powerchip Semiconductor, Taiwan's largest memory chip maker, Wednesday said it plans to spend NT$35.1 billion (US$1.09 billion) on new chip factories, technology and production line equipment this year, less than half the NT$86.3 billion it spent last year. Powerchip's smaller rival on the island, ProMOS Technologies, also more than halved its projected 2008 capital spending to US$800 million, down from US$1.84 billion last year. The company also put the expansion of its fourth 12-inch factory on hold pending a rebound in the DRAM market. United Microelectronics (UMC), the world's second largest contract chip maker, forecast its 2008 capital spending at US$500 million to US$700 million, down from US$900 million last year.

InfoWorld

Posted by | Wed, Jan 30, 2008 - 08:02 AM