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Singapore is ready for the Elpida fall out
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Tuesday, March 13, 2012
Industry leaders say Singapore's computer chip makers are well prepared for the shake-up caused by the bankruptcy of Japan's Elpida Memory.
Chip prices are expected to continue to fall but technology and innovation will continue to keep the industry viable.
Japan's Elpida made its name making super fast DRAM memory chips for PCs.
Unfortunately, it was not fast enough when prices collapsed for personal computers.
Last week, the third biggest player in the DRAM market went bankrupt, further shaking the industry which has been whittled down to just four companies producing 99 percent of global output.
Singapore has nurtured its semiconductor industry for two decades, and says it is ready for the fallout.
President of Singapore Semiconductor Industry Association (SSIA), Ulf Schneider, said: "We predict that prices need to come down and as long as it doesn't collapse, typically our industry is prepared for this. (We are) prepared because we have a certain upgrade of productivity and technology to support this."
Singapore-based Avi-tech, which provides products and services to the chip industry, said most memory makers have excess capacity.
The problem is amplified by the popularity of tablets and smartphones.
CEO of AviTech, Lim Eng Hong, expected more consolidation, especially among chip manufacturers who have little or no R&D capability in an industry with just single-digit growth prospects.
Manufacturers in Singapore, which produces about 11 percent of total worldwide wafer, or microchip, output, have challenges at hand.
Head of Portfolio Management Singapore, REYL Singapore, Daryl Liew, said: "Singapore companies, for example, have to move up the value chain especially now with cost pressures coming in as well. On the labour side with the reduction of foreign labour coming in, effectively companies need to automate, try to improve productivity, otherwise they need to shift their manufacturing base where the costs are lower."
The SSIA said Singapore can maintain its global market share against the likes of South Korea, which through Samsung and Hynix controls 75 percent of the industry, provided external factors remain stable.
Toshiba and Micron Technology are looking at possible deals with Elpida to add mobile DRAM capacity and offer mobile memory chip package solutions - these the SSIA said would create strong competition for Samsung.
Mr Schneider expects the industry to maintain its current market share on the global stage, providing external factors such as the EU debt contagion remain contained.
By: DocMemory
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