Hyundai pushes DRAMs; will spend $3.76 billion on Scottish fab project

12/01/1996

Hyundai pushes DRAMs; will spend $3.76 billion on Scottish fab project

South Korean chipmaker Hyundai, continuing its efforts to gain market share in DRAMs, will spend a billion UK pounds ($1.56 billion) to build a large DRAM fab in Scotland, with the prospect of adding a second phase later.

A spokeswoman for a Scottish development agency said that the Hyundai Electronics Europe facility would be built in Halbeath, near Edinburgh, with construction on the first phase beginning in March 1997. Production of 64-Mbit devices is slated to begin by the end of 1998, with an extension to 256-Mbit parts following some time thereafter. Some 1000 people will be employed at the fab, which will process 30,000 200-mm wafers/month.

The second phase, for which no firm date has been set, is expected to cost about 1.4 billion pounds ($2.2 billion), and employ an additional 2000 people. Hyundai did receive government incentives for the project, but the spokeswoman declined to detail them.

Like its fellow Korean firms Samsung and LG Semicon, Hyundai has shown a willingness to invest in leading-edge production facilities even during downturns, and was the fourth-largest DRAM producer in 1995, according to market researcher Dataquest.

H.K. Yoo, managing director of Hyundai Electronics Europe, remarked that the firm hopes to be the world`s second-largest memory producer by 1999. Virtually all of the firm`s 1995 semiconductor revenue came from DRAMs, but it is seeking to diversify, in part through its acquisition of the former NCR Microelectronics unit of AT&T (now Symbios Logic). The company currently has new fabs under construction in Ichon, South Korea, and Eugene, OR; both are expected to begin production next year.

Hyundai`s aggressive fab construction runs counter to the general wisdom in the memory industry today; several DRAM fab projects have been postponed in recent months as companies re-evaluate market conditions in light of heavy price drops. Spot market prices on DRAMs have begun to rise, however, and the South Korean firms are certainly seeking a leadership position for the next upturn. - P.N.D.