Taiwanese companies ramp up semiconductor investment
20 Mar 1999
The shifting of manufacturing industry from
one country to another with the changing economics of
the business has happened time and again -- with textiles,
chemicals, steel ... Now it's the turn of the semiconductors
called memory chips to shift locale. Having moved from
the US to Japan, and thence to South Korea, the memory
chip manufcaturing capacities are getting strengthened
in Taiwan while the Japanese and Koreans fall behind.
The Japanese are finding the margins in memory chips not
good enough. The South Koreans, who had made a breakthrough
in this tough market, are beset with financial problems.
Enter the Taiwanese. Taiwanese companies are planning
to invest as much as $10 billion in the chip business
in the next two years. The Koreans will invest barely
a third of that amount in the same period. And, by the
year 2002, the Taiwanese will have crossed Japanese investments
in this business. They are projected to invest as much
as $13 billion compared with $11.7 billion by Japanese
companies, according to a study by VLSI Research Inc,
the market research firm.
Typically of the Taiwanese, the chips will be made for
American and Japanese companies. Companies such as TSMC,
United Microelectronics Corp and Umax are building expertise
in the process.
Not all such manufacture is profitable, however. Acer, Taiwan's PC maker, has incurred
huge losses on acount of the drop in chip prices that
resulted from over-capacity in the global chip industry.
