TOKYO -- Elpida Memory will invest roughly 80 billion yen ($758 million) to expand chip production, adding cutting-edge fabrication equipment with an eye toward catching up to DRAM market leader Samsung Electronics.
This would mark the chipmaker's first capital investment in three years. The company is rebuilding its business with help from U.S. firm Micron Technology.
With the fresh investment, its Hiroshima plant will begin mass-producing DRAM chips with 20nm circuit widths in the latter half of this year. Currently, the most advanced mass-produced chips measure 25nm, while Samsung has the technology to make circuit widths in the lower end of the 20nm range. Reducing the size to 20nm will enable 20% more chips to be cut out from each wafer.
Designed for use in smartphones, Elpida's new chips are expected to consume 10% less electricity, a boon to device makers concerned about extending battery life.
Elpida spent 70 billion yen on equipment in the year that ended in March 2012, but an economic slump and poor sales of personal computer products hurt its business. It filed for bankruptcy protection under the Corporate Rehabilitation Law and became a wholly owned subsidiary of Micron last July. The move doubled Micron's share of the global DRAM market to 28%, putting it on a par with second-place SK Hynix.
To challenge Samsung, which holds 37% of the market, Micron is boosting its capital spending for the year ending in August to as high as $3.1 billion, double last fiscal year's figure. About half of this sum will be invested in Elpida plants in Japan and Taiwan. The Hiroshima site, which boasts advanced microprocessing technology, will be positioned as a supply base for cutting-edge products.
Smartphones and tablets are bolstering the DRAM market. Prices doubled over the course of 2013 and have remained high. The handsets are expected to become widespread in Asia, further tightening the DRAM supply-demand balance and fueling competition among manufacturers.