Tag: Inotera

Micron snaps up rest of Inotera

Samsung DRAMUS memory maker Micron has bought the rest of Inotera, strengthening its position in the DRAM market.

Micron already owned a third of Inotera and it will pay $3.2 billion to buy a majority share.

The situation is a little complicated, according to Taiwanese wire Digitimes, because Formosa Group, which owns its own memory company Nanya, has 32 percent of the shares of Inotera.

But it’s understood that Formosa will vote in favour of the acquisition. At the same time, Micron said it has made a contract to give Nanya an option to license its new technology.

Micron already has a deal with Nanya to license its 20 nanometre technology.

All in all, this gives Micron a far stronger position in a market largely dominated by South Korean giants Samsung and Hynix. Earlier this year, Tsinghua – a mainland China state-backed comglomerate, made a failed bid to buy Micron..

DRAM prices set to drop

Samsung DRAMA combination of better technology but slower demand for dynamic random access memory (DRAM) will lead to prices dropping until the end of the year.

Market research company DRAM Exchange said that there’s weak demand for both notebooks and smartphones and the major manufacturers all showed a revenue fall.

Korean manufacturers Samsung and SK Hynix between them held 70 percent market share during the second quarter, but US manufacturer Micron’s market share fell to around 20.7 percent during that quarter.

Samsung is way ahead of the pack on the manufacturing front and is outstripping its competitors who won’t catch up to the firm’s 20 nanometre process for at least another six months, said DRAM Exchange.  The smaller the process technology, the more DRAM chips can be produced on a single wafer.

Micron won’t be able to produce memory chips using the 20 nanometre process until the first quarter of next year, while other players including Nanya and Inotera will take longer to catch up.

This is how the major DRAM players are doing in terms of market share.

DRAM market share 2015

450mm wafers set to polarise semi industry

There will be clear winners and losers in the semiconductor market once the big players adopt 450mm wafers over the next few years. And the biggest losers are set to be the Taiwanese DRAM manufacturers, according to Malcolm Penn, CEO of semi market research company Future Horizons.

Intel, Samsung, TSMC, IBM and Global Foundries are followers of the Global 450 Consortium announced at the end of last month, and AMD will probably be forced to follow, said Penn.

But others probably can’t bear the expense. Sandisk and Toshiba will likely be forced to follow or suffer the slings and arrows of a Samsung waving its 18 inch wafer.

Penn said that the motivations for investing in 450mm wafers for the big players are clear. Once everything is up to scratch, the players will see a 30 percent die cost reduction as well as increased wafer capacity demand. The third reason, which no players will acknowledge, is to kill the competition.

The big five Taiwanese DRAM makers – Nanya, Inotera, Powerchip, ProMOS and Rexchip are at least one process node behind Samsung, and together owe $15 billion. Although they have 30 percent of total industry capacity, Penn said that they are trapped in a DRAM “valley of death”. Flash manufacturers are, however, in a “roses, roses” situation right now.

But, Penn said, even the mighty Intel doesn’t know what capacity it might need in three years’ time. There are several possibilities as to what might happen according to Penn. Micron could take a bigger share in Nanya, while Elpida could swallow up Rexchip and grab a bigger stake in Powerchip. He said that next year could prove to be a do-or-die year for the Taiwanese manufacturers, while the future of Hynix is currently unsure.

Speculation mounts that Formosa might dump Nanya, Inotera

Nanya and Inotera are owned by massive conglomerate Formosa Plastics. So, by the way are Via and HTC.

But now there’s an interesting rumour reported by Taiwanese wire Digitimes.

It said there is speculation that Formosa Plastics, currently beset with problems over fires at its plants, might abandon both Nanya and Inotera.

Both of the companies turned in net losses recently because people are just not buying as many PCs as they used to.

There’s been a push recently for all the Taiwanese companies to band together to fight off threats from other of the major Dramurai. The same Digitimes report said that Powerchip is pushing the Taiwanese government to make moves to consolidate the DRAM industry on the island.

Those rumours, it said, have been denied. But something has got to give and consolidation may well be the name of the game.

ProMOS receives bail out from creditors

Taiwanese DRAM maker ProMOS has been given a lease of life following a bailout by bank creditors.

It has been reported that the memory manufacturer has struck a deal to swap half of its debts for equity in a bid to save the ailing firm.

With many of the 30 creditor banks thought to be government backed, it appears that assurances from Taiwanese authorities that ProMOS will get all “necessary assistance” it needs have been acted upon.

ProMOS had already been told to slash its capital by 85 percent recently, and it is at least hoped that the firm can start rebuilding with the help of its creditors, writes Focus Taiwan.

The deal means that creditors have agreed to swap $971 million of the total $1.97 billion debt in exchange for equity in the company.

They will also lower interest rates from 3.5 percent to 0.1.

In return ProMOS will have to outline how it plans to get itself back on its feet, with a demand that a new management team is put in place next year to get it on the right track.

But whether or not this is enough to reverse the fortunes of the DRAM maker is quite unclear at this point.

Shares of ProMOS jumped following the news of the bailout, but it does not mask the precarious situation that many DRAM manufacturers are in with the current market situation.

And it is not the only firm that is struggling with the price drops in DRAM.  Domestic rivals Nanya and Inotera have also been enduring a torrid time of late.

Both Taiwanese DRAM makers reported losses recently as the demand for DRAM drops in the face of rise in popularity of mobile devices such as tablets and laptops, which tend towards NAND flash memory use.

DRAM maker Elpida recent change of tack was symbolic of the change in emphasis, pushing substantial funds into its own NAND flash production.

And with Samsung in a dominant position, there are talks in Taiwan of another attempt to team up the island’s DRAM firms to stand a better chance of survival.

Kingston’ David Sun was one who has called an alliance to fend off Samsung.

John Hsuan at UMC also made noise recently about a DRAM alliance, having been part of a failed attempt in 2009.  However he ruled himself out of leading any such cooperation between the island’s firms.

There are hopes that as more firms move to a 30 nanometre process later this year there will be a greater demand for DRAM products.

But at the moment the slow demand for desktop PCs is threatening to drag down the DRAM market. Indeed firms away from Taiwan are also feeling the strain with Hynix seeing a drop in profits last week.

As if this was all bad enough for the DRAM market, it has also been noted recently that NAND flash could be used in the mainstay of DRAM usage, desktop PCs.

So there is certainly plenty of cause for concern for the DRAM market in both the short and long term.

Hynix profits drop 34 percent

Hynix Semiconductor has announced a slump in profits as the memory chip industry struggles with slow demand.

The South Korean company posted second quarter results of $488 million net profits, showing a 34 percent drop compared to the same point last year.

Revenues also dropped, with a 16 percent decline over the year.

The firm put this down to slowly growing demand, with other DRAM makers such as Nanya and Inotera posting declines too.

Despite the effects of the Japanese earthquake disruption pushing demand up briefly, economic instability across the globe has seen the trend reversed, says Hynix.

From the previous quarter, DRAM bit shipments were flat, with an average selling price decline of one percent. NAND flash shipments rose 36 percent, while the ASP dropped by 19 percent over the same period of time.

Like other memory makers, Hynix plans to look towards 30 nanometre process products in a bid to drive demand in the near future.

This could lead to more activity in the consumer PC market which has been lacklustre of late, and Hynix looks set to increase its 30nm output by 40 percent by the end of the year.

Hynix has also planned to start mass production of it next gen 2Ynm class process in the second half of this year.

Slow PC demand sees Taiwan DRAM makers suffer losses

Two of Taiwan’s major DRAM players have reported losses in the first half of the year due to slowing demand for PCs.

At an investor conference, the island’s second largest chip manufacturer, Nanya, reported net losses of $574 million in the first half.

This was echoed by fellow Taiwanese DRAM maker Inotera, which also saw losses to the tune of $134 million.

Nanya’s second quarter revenue fell 27 percent year on year, meaning a revenue loss of $273 million. This was the sixth consecutive quarterly loss for Nanya.

Nanya did see its average selling price rise by 10 percent in the second quarter from the start of the year, however this was still a 57 percent drop from the same point last year.

Meanwhile shipments climbed two percent from the preceding quarter, and this is expected to increase between 10 to 20 percent in the next quarter.

Nanya pointed to a few factors for the poor results, including sluggish demand for PCs in mature markets – in part due to financial instability in certain economies.

However, the firm showed some signs of optimism.  For example, there are expectations that a migration to a smaller process will see better results. 

Business PC demand remained stable, while smartphone DRAM continued to grow, it said in a statement.

Spot prices were a concern going into the third quarter however, and Nanya has indicated recently that this could lead to a cut in production.

Inotera also saw its second quarter revenues take a hit, dropping 10 percent.

There was a six percent jump in quarterly sales revenue from the start of the year, which the firm attributed to higher selling price.

Inotera also signalled its intention to produce high-end products for the server and mobile DRAM markets.

Inotera looked towards the trials of a new 30 nanometre process, with pilot runs in the third quarter, followed by volume production at the start of 2012.

IHS iSuppli recently noted that a move to smaller lithography processes will help the DRAM market bounce back fully in the long run.

Meanwhile, an increase in its 42nm process chips is expected to see 25 percent boost in shipments, going into the second quarter.

According to CENS, PowerChip Semiconductor (PSC) also saw losses of $41.8 million with a revenue of $423 million during the second quarter.

Formosa Petrochemical loans Nanya and Inotera cash

Formosa Petrochemical is giving a financial hand to Nanya Technology and Inotera.

The company will provide one year loans of $167.34 million to Nanya and $270.8 million (NT$8.5 billion) to Inotera in a bid to help the two memory outfits buy new equipment in their move toward 42nm.

The loan should help with Nanya and Inotera’s 2011 capital expenditure which ran at less than the $975 million (NT$30 billion) and $19 million (NT$58 billion), respectively. However, the companies have yet to finalise their 2011 budgets according to DigiTimes.

Formosa Plastic Group is the parent company of Nanya. The Forbes-listed Cher Wang is the heiress to the company and the ties run deeper. She’s married to Via‘s CEO, owns Inotera and FIC and is the chair and co-founder of smartphone giant HTC. She can afford to spend a bob or two to keep Nanya and Inotera rolling.

It’s not the first time Wang has thrown money at the companies. In November, Formosa supported a Nanya fund raiser, which involved placing orders for new shares despite Nanya stocks falling below the $0.55 (NT$16.50) new share offering price at the time.

Despite this they managed to raise $300 million (NT$9.9 billion). In addition, Nanya had previously borrowed $167.34 million (NT$5 billion) from Formosa Petrochemical, bringing the total to $303 million (NT$10 billion).

Inotera migrates to 42 nanometers

DRAM maker Inotera Memories said that its planned migration to a 42 nanometer production process will be two months earlier than planned.

Inotera is a DRAM-manufacturing joint venture between Micron and Nanya and company chairman Jih Lien told Digitimes that the move will take place in September 2010, two months ahead of its original schedule.

Inotera has been flat out making 50 nanometre products. More than half its productionwill use the 50nm technology which has caused production costs to be lower.

Inotera needs all the help it can get. The outfit slipped back into the red in the first quarter due to production losses incurred from its process transition from trench to stack technology.

The move to 42nm technology is part of a cunning plan to bring itself closer to Samsung. Production is expected to kick off in small volume at the end of the year.

Inotera will use 10 sets of immersion scanner equipment settled at its fabs by the end of the year.

There had been some fears that Samsung would flood the market with too many DRAM chips, but now it is starting to look as if Samsung wants to take on Toshiba in the NAND flash segment instead.

The impact of Samsung’s capacity ramp on the global DRAM market should be lower than expected, Lien said.