Inotera Memories Inc (????), a DRAM chip manufacturing arm of Micron Technology Inc, expects output to grow at a faster rate than the overall DRAM industry’s 25 percent next year after converting all its capacities to 20-nanometer (nm) chips.

Inotera expects to complete the technology migration in the first quarter next year, Inotera president Scott Meikle said.

The company has invested US$3 billion in the new technology over the past 18 months, he said on the sidelines of an annual semiconductor trade show.

That means “2016 will be a very, very good year for Inotera... We will have mature 20nm [chips] and the market will be healthy,” Meikle told reporters. “Supply and demand should be OK next year.

Meikle said his optimism is based on slower output growth from industry leader Samsung Electronics Co, as the South Korean company does not have any major technology migration plans for next year.

In addition, the threat from Chinese firms is still remote, he said.

Inotera is to plan investments in next-generation technology for operation early in the fourth quarter of next year, Meikle said.

The company plans to ship its first batch of next-generation chips in 2017 at the earliest, he said.

Overall capital spending next year will be lower than this year’s NT$57 billion (US$1.74 billion), as investment in the new technology is still at an early stage, he said.

Meikle said Inotera has seen signs of stabilization after weakness in pricing in the first half.

“Over the past couple of weeks, PC DRAM prices are stabilizing on the spot market,” Meikle said.

The contract prices of mainstream DDR3 DRAM chips plunged 15 percent to US$20.5 in July from the previous month, which will bring this quarter’s average DRAM price to US$20 in light of sluggish demand for PCs and mobile phones, market researcher TrendForce Corp (????) said last month.

Micron and its subsidiaries are under pressure to safeguard their profitability next quarter, as their factories primarily make DRAM chips using 30nm technology, TrendForce said.

Inotera said that about 80 percent of its production will be on 20nm technology at the end of this year.

Inotera shares rose to NT$19.75 yesterday.

By: DocMemory
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