Tuesday, November 13, 2007
Following two sequential quarterly losses and a full year net loss of approximately $365 million, Qimonda has trimmed capital spending for 2007 as well as guidance on CapEx for 2008 that is lower than its revised 2007 figure.
Qimonda executives said in a conference call with financial analysts that CapEx for the financial year 2007 had come in at approximately $1.29 billion, down from approximately $1.32 billion as previously projected.
In its 2008 financial year, CapEx would be in the range of approximately $953 million to $1.1 billion. Spending in 2008 would primarily be focused on further ramping its 300mm fab in Richmond, Virginia and an allocation of approximately $293 million towards the shell completion of its new 300mm fab in Singapore. It was noted in the call that 2008 CapEx would be inline with tool depreciation costs.
A new line of credit had also been put in place at favourable rates to allow for the first phase equipment installation and ramp of the new fab in 2008, which remains on schedule.
R&D spending would be increased in 2008 compared to 2007 in an effort to speed up technology node migration and offset plunging DRAM prices. Qimonda guided that R&D spending would be in the range of approximately $660 million and $719 million. However, this figure is lower than the previous guidance of approximately $800 million for 2008.
Much of the R&D spending increase is due to Qimonda’s decision to migrate technology nodes more aggressively. The company highlighted that to further reduce costs it was on track to have more than 50 percent of its fab capacity migrated to the 80nm and 75nm nodes by December 2007.
The target was to have 90 percent of installed capacity on 80nm and 75nm by September 2008. This would be supplemented with its foundry partners that include Inotera, SMIC and Winbond migrating production to the smaller feature sizes in 2008.
According to Qimonda, its foundry partners are on track to have 75 percent of production converted to 80nm and 75nm by March 2008 and 90 percent by September 2008.
Interestingly, Qimonda is preparing a cost-optimized 1G DRAM chip on 75nm in early 2008, though executives did not go into the details of such a device.
Importantly though, Qimonda is speeding up its node migrations, which is part of the reason for the higher R&D spending announced for 2008. According to Thomas Seifert, COO at Qimonda, the company would introduce a 58nm process in 3Q08.
By: DocMemory
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