As Japanese and Korean chip manufacturers head for the doldrums in the memory market, Taiwan is set to pick up the pieces with cheaper parts and additional fabrication facilities, it has emerged. All the major Japanese players, including NEC, Fujitsu, Mitsubishi and Hitachi, showed slumps in their revenues because of the dropping price of memory earlier in the year.
That news is likely to upset British politicians and mean fewer jobs here in the home market. In the past two years, senior UK politicians including deputy prime minister Michael Heseltine have made a great play of encouraging inward investment from Korean and Japanese companies including Samsung, NEC, Fujitsu and others - but such investment from Taiwan is less likely.
NEC said that its DRam production had fallen by four per cent - to a value of nearly $5 billion - for the first half of its financial year. The more significant figure is that it now devotes only 30 per cent of its total integrated circuit (IC) production to memory, compared to 43 per cent, year on year.
The performance of the Japanese and Korean companies, all of which invest billions of dollars in producing fabrication plants for the chips, is set to be further undermined by increased Taiwanese capacity, according to Roy Taylor, UK managing director of Vanguard Electronics.
He said that Taiwanese companies were predicting that cheaper manufacturing methods and additional fab facilities will allow the island to undercut other Far East players in the next two years.
That point was underlined by an announcement last week that the Taiwanese government is to build another industrial park in Tainan. Its existing centre at Hsinchu is now fully occupied and the new park will host up to 50 wafer fabs.
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