Following a March announcement about expansion of a backend facility in China and a DRAM module facility in Malaysia, Qimonda announced plans to construct a 12-inch fab in Singapore.

Qimonda earlier announced that it would construct a new fab in Asia with China, Taiwan and Singapore being potential spots. The company now plans to invest approximately two billion euros in a site in Singapore site over the next five years.

The new fab will house a 20,000 square meter clean room space and is expected to add 60,000 wafer starts per month to Qimonda's overall front-end capacity when fully ramped.

Qimonda targets to finance the initial capital expenditure for the building out of its own cash flow and will utilize project-based financing thereafter. Commencement of construction is scheduled for the end of 2007, with production expected to start in 2009. When running at full capacity, the new fab will have more than 1,500 employees.

Company president and chief executive officer (CEO) Kin Wah Loh stressed that selecting Singapore as its new fab location will move the company closer to its customers in Asia and benefit Qimonda from local competitive cost structures and manufacturing know-how, eventually reducing the company's exposure to exchange rate fluctuations compared to the US-dollar.

On a separate note, Qimonda also announced its first quarter (fiscal second quarter) financial results yesterday. The company saw its net sales reach 984 million euros, up from 928 million euros last year but declined from 1.17 billion euros compared to the previous quarter.

While stressing a tough market situation for DRAM, Loh noted that the company is capable of maintaining profitability due to diversified product portfolio and productivity enhancements with over 60% of the company's capacity made on 90nm and below processes.

In its second quarter outlook, the company foresees a 8-12% sales growth from additional capacity at Richmond and contribution from Inotera Memories, its joint-venture (JV) with Nanya Technology of Taiwan

By: DocMemrory
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