NEC uses its own funds to build fab

APRIL 9–TOKYO–NEC Electronics Corp., the world’s largest maker of semiconductors for cell-phone screens, will use its own cash to fund additional chipmaking capacity that may cost more than 100 billion yen ($940 million).

“We have 200 billion yen in cash so we can afford to build” without raising additional funds, Hiroshi Sato, senior vice president and chief financial officer of the Kanagawa prefecture- based company said.

NEC Electronics will add a factory to meet demand for its chips used in DVD recorders, cell phones and automobiles. Monthly capacity of silicon wafers with a diameter of 300 millimeters, from which the chips are produced, will be increased to 14,000 units from 4,000.

NEC Electronics said it will spend 5 billion yen on a new building to house the increased production capacity. Chip making equipment and clean rooms needed to handle the chips will form much of the extra costs. The 98 billion yen raised when the company made its initial share sale last July, coupled with profitability in the business year ended March meant that “we are still cash rich,” Sato said.

NEC Electronics says it is the biggest maker of semiconductors for DVD recorders, and supplies makers of personal computers that have DVD functions, such as Dell Inc., Hewlett-Packard, and consumer electronics makers such as Toshiba Corp. and Pioneer Corp.

NEC Electronics is also the third-biggest maker of system chips used to operate digital cameras, with a market share of about 16 per cent.


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