NEW YORK — One year into his tenure as CEO of the world's third largest DRAM maker, Kin Wah Loh, CEO of Qimonda, is out to prove that his company can be nimble and aggressive rather than a problematic memory division cramping the style of its parent company, Infineon Technologies AG.
Amid falling DRAM prices, Loh made a bold move last week by unveiling his company's plan to invest 2 billion euros over the next five years in a 300-mm wafer manufacturing facility in Singapore, Qimonda's first fab in Asia.
Separately, Qimonda said it has entered into an agreement with SanDisk Corp. to form an equally-shared joint venture that will develop and manufacture flash-DRAM multichip packaging (MCP) products for the mobile handset market.
In an interview with EE Times, Loh, a native of Malaysia, appeared unfazed by the the latest DRAM price slump described by some industry analysts as barely covering the cost of production. "If you don't have the stomach for ripples in the market, you shouldn't be in the semiconductor business," Loh said, adding, "You invest during downturn. You don't react to short-term changes."
He argued that the DRAM market is "still in an adjustment stage" due to an inventory build up and a DRAM glut created by Qimonda competitors who shifted from NAND to DRAM capacity earlier this year in response to a sharp decline in NAND prices. Loh insisted that demand for DRAMs is "still there." Qimonda is expecting 55 to 65 percent DRAM bit production growth in the 2007.
Since last May, when Qimonda was spun off from Infineon, Loh and his team have been moving "at a warp speed," he said. The company launched an IPO last August, and is now pressing ahead with the 300-mm fab in Singapore. "We have a very clear vision for our memory business," said Loh.
One of Qimonda's tenets for DRAM production is that 50 to 60 percent of its memory production must be at its wholly-owned fabs. Of the remainder, 10 to 15 percent goes to foundries and the rest to joint ventures. Qimonda owns fabs in Dresden, Germany, and outside Richmond, Va.. Foundry partners include SMIC and Winbond. Qimonda also works with Inotera Memories Inc., a joint venture in Taoyuan, Taiwan, founded in 2003 with Nanya Technology Corp.
Why stick with its own fabs for the majority of DRAM production? "We want to match our product portfolio where we produce 50 percent of our DRAMs for non-PC area," Loh responded. Non-PC products include memories for digital cameras, game consoles and mobile phones. "They demand much more complex memory products, for which we need our own fabs."
As the memory market for non-PC products continues to grow, Qimonda estimates it will run out of capacity at its own fabs by 2009.
Qimonda's plan is to complete construction of an empty shell in Singapore by the end of 2008. Depending on global chip demand, it hopes to be in a position to ramp up the fab "within a matter of several months," said Loh. The Singapore fab will launch operations at the 50-nm technology node, he added.
Half of Qimonda's volume production is currently at 80 nm and below, according to Loh. The transition to 70 nm in Dresden is complete, and "it's in process in Richmond." Inotera's bit production in the March quarter increased to 15 percent, exceeding the 8 to 12 percent range Qimonda expected in the third quarter.