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Niche market boom drives up production at Taiwan's DRAM chipmakers.

Taipei, July 20, 2009 (CENS) -- Despite the market for commodity memory chips remaining lukewarm, Taiwan's DRAM chipmakers PowerChip Semiconductor Corp. (PSC) and Nanya Technology Co. received healthy contracts in the second quarter to make specialty memory chips for Elite Semiconductor Memory Technology Inc. and Etron Technology Inc.

Memory-chip design houses pointed out that the swarming orders seen in a traditionally slacken season proved that the market for built-to-order memory chips has picked up from its worst time.

Industry watchers estimate demands for niche memory chips would likely trend upward throughout the second half this year in consideration of strong consumptions of mobile phones and LCD TVs.

Brisk inventory buildups at customers have brought Elite and Etron hefty orders for niche memory chips, maintaining revenue growth at the two vendors at over 40% rate in the second quarter over a quarter earlier and driving up their revenues for June to new highs of the second quarter.

PSC executives noted the specialty memory chips kept its contract manufacturing lines running at full capacity as the firm's major profit earner in throughout the second quarter, while commodity-memory chip manufacturing stayed underperforming.

PSC, currently Taiwan's No.1 DRAM chipmaker by volume, makes contract chips mostly at a reinvested 200-mm wafer fab, whose output is 40,000 wafers of chips, and an in-house 300-mm wafer fab, which sets aside a capacity of 30,000 wafers for contract manufacturing service. PSC is using 65-nm process to make contract chips.

PSC executives pointed out that earnings from contract manufacturing service still fail to make up for loss from manufacturing of commodity chips, but contract manufacturing is not a burden to the company as is its commodity-chip business.

Nanya said its output of contract chips is now around 10,000-20,000 200-mm wafers a month, staying steadily profitable.

Industry watchers pointed out that test and packaging houses capable of dealing with specialty memory chips were also beneficiaries of the recent market upturn.
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Title Annotation:dynamic random access memory
Publication:The Taiwan Economic News
Article Type:Brief article
Date:Jul 20, 2009
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