FPG to invest NT$64 b in DRAM operation in 2010.

Taipei, Oct. 22, 2009 (CENS)--Backed by the deep pocket of their parent firm Formosa Plastics Group, Nan Ya Technologies and Inotera Memories, two major DRAM (dynamic random access memory) makers, will spend NT$64 billion on capital outlay next year, 2.5 times this year's level of NT$26 billion, for entering sub-50 nanometer technology, thereby greatly boosting their global competitiveness.

Nan Ya predicts that the technological upgrading can help it attain global market share of 10% next year, the first among domestic DRAM makers to pass the mark.

The two companies are expected to lead domestic peers in carrying out the technological upgrading, as the latter are still mired in dire financial straits, despite recent upturn in DRAM prices.

Nan Ya and Inoreta will be the domestic tech firms with the second highest capital outlay last year, trailing TSMC (Taiwan Semiconductor Manufacturing Co.) with US$3-3.5 billion but leading UMC (United Microelectronics Corp.) with US$1 billion. Spurred by the recovery in the global semiconductor industry, many other domestic tech firms are also expected to enhance their capital outlays next year, including ASE Inc. and Siliconware, both of which plan to spend over NT$10 billion on capital outlay in 2010.

Charles Kao, president of Inotera, reported that the company has started applying 50-nanometer manufacturing process in trial production from the third quarter and is scheduled to enter mass production in the first quarter next year. The company will convert its capacity, totaling 130,000 pieces monthly now, to 50-nanometer technology by the end of next year and start deploying 40-nanometer technology then.

The company will spend NT$45 billion to fund the upgrading in manufacturing process next year and for that purpose, it will secure syndicated loan of NT$20 billion by year end, following the raising of NT$10 billion via the issuance of GDR (global depository receipt) earlier this year.

Nan Ya has also completed the trial production with 50-nanometer technology and is scheduled to convert its capacity, reaching 30,000 pieces monthly now, to the new technology next March, which will entail capital outlay of NT$19 billion next year. To fund its technological upgrading, it has secured NT$10 billion of fund via private share placement this year.

Both companies are expected to cut their production cost by 50% with the substitution of 50-nanometer technology for 70-nanometer technology and reduce the cost by another 30% with the deployment of 40-nanomter technology.