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DRAM manufacturers increasing capital spending to boost production in 2007 |
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Jan 24, 2007 at 05:50 PM |
 Some first and second tier DRAM memory manufacturers are planning to further increase bit-production in 2007 compared to 2006 by both technology node migrations and further capital equipment spending to increase wafer starts. Samsung, Qimonda and Nanya have all highlighted the need to boost production due to tight supply and strong forward anticipated demand due to the roll out of Microsoft's new operating system that demands higher levels of DRAM to function properly. Bit growth is estimated to grow between 55 and 65 percent in 2007.
Samsung, the world's largest DRAM maker, started increasing tool orders early in the fourth quarter of 2006, a quarter earlier than equipment makers had expected. Samsung has now said that its capital spending will be slightly down on 2006 figures; however the figure is still in the $6 billion US dollar range with more spending allocated to memory in 2007 as compared to 2006. Samsung is planning to spend approximately $4.5 billion on memory fabs located in Korea and another $1 billion on its new 300mm fab in Austin, Texas this year.
Overall, Samsung expects DRAM production to increase by approximately 30 percent in 2007, compared to 2006. The company is also rapidly migrating DRAM devices to the 80nm node in 2007.
Qimonda AG, the second largest supplier of DRAM, has also announced that it expects its bit production growth to be between 10 and 15 percent in the first quarter of its 2007 financial year. Additional capacity will come from its foundry partners such as Inotera, Winbond and SMIC, which are all ramping facilities in 2007.
Qimonda also transitioned more than 70 percent of capacity to 300mm wafer production in 2006 while migrating approximately 40 percent of DRAM production to the 90nm node. In 2007, Qimonda expects to start conversion to 80nm and 75nm technology later in the year.
Qimonda also expects to increase capital spending in 2007 that will primarily go towards increasing production at its 300mm fab in Richmond, Virginia. The company noted CapEx would be in the range of $1.2 billion in 2007, up from approximately $200 million in 2006, while bringing in approximately $120 million of CapEx from its 2008 plans to boost production at Richmond to about 36,000wspm by year end. Qimonda's 300mm fab in Dresden will also get tool upgrades for the 75nm node migration.
Nanya Technology, Taiwan's second largest dedicated memory manufacturer after PSC, plans to ramp its first 300mm facility (Fab 3, pictured) in the second half of 2007. First phase tool install is expected in 2Q07 with volume production starting in 4Q07. Nanya is estimated to be spending over $1 billion on capital equipment this year as it attempts to reach 30,000wspm in a first phase ramp with a capacity of 62,000 wafers expected to be reached by mid-2009.
Market analysts are projecting that over 50 percent of front-end capital spending will be attributed to both DRAM and NAND flash production increases in 2007. The majority of this is expected to be front-half year loaded as a small supply shortage is being projected at the end of the year with memory makers wanting to maximize ASPs at that time of the year.
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