Intel-Micron JV delays Singapore chip output

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Monday , May 05, 2008 at 1110 hrs An Intel-Micron joint venture will delay the start of production at its Singapore wafer fabrication plant by six months to mid-2009 because of weak market conditions, an executive told Reuters on Monday.

IM Flash Technologies LLC had been expected in December to start making NAND flash memory chips, widely used in digital cameras and mobile phones, at its Singapore plant. The firm is a manufacturing joint venture formed by Intel Corp and Micron Technology Inc.

"The NAND market has plummeted, pricing declines have been the trend, and supply has outrun demand," Rodney Morgan, co-executive officer of IM Flash Technologies, said in an interview on the sidelines of a conference, adding that these market conditions were the primary reason behind the delay.

Research firm iSuppli estimates that average prices of NAND chips have slumped by 36 percent in the first quarter of this year, and are expected to fall 13 percent in the second quarter. It predicts that NAND prices could stabilise by mid-year.

The Singapore factory is the joint venture's fourth factory and its first plant outside the United States. It will make 50-nanometre flash memory chips from 12-inch silicon wafers.

One nanometre, which refers to the gap between transistors on a chip, is one billionth of a metre. The more transistors that can be included, the more powerful the chip and the higher the profit margins.

"We expect a slight impact on supply as a result of the delay," Morgan said.

Construction of the Singapore factory began in April last year and the firm expects to move in equipment in September. It employs about 800 staff.

Morgan declined to disclose the capacity of the plant, but said full capacity production would begin within a year from the start of output.

He also declined to reveal the cost of building the Singapore factory, but said it was 20-30 percent cheaper than building a similar plant in another location.

The electronics sector produces a third of Singapore's factory output but some manufacturers have moved to cheaper locations such as China and Vietnam.