Asia Memory-Bad memories fading

TMT
Memory Devices Technology
8 October 2010
abc
comprising. specialty DRAM; 3xnm migration at
Hiroshima is likely to be limited in the shorter term.
Rexchip – the commodity DRAM arm
Over time, Rexchip will manufacture all of
Elpida’s commodity DRAM. Rexchip is to convert
its entire 80kwpm 300mm capacity to Elpida’s
4xnm process by end-2010. As at September, 10%
of wafer input was based on 4xnm, with the
remaining on 65nm XS. Positively, Rexchip should
have received all the tools required for full 4xnm
migration by the end of this November.
Elpida completed development of 3xnm DDR3
(30% smaller, 40% more efficiency compared to
4xnm); engineering samples should be out by
December. Mass production is to start by end-2010,
with production ramp next spring. Production uses
existing equipment with double patterning. Once
satisfactory yields are achieved, the technology will
be transferred to Rexchip, which will completely
migrate to 3xnm in the longer term.
Wafer capacity (kwpy)
4,000
3,000
2,000
1,000
-
2007 2008 2009 2010f 2011f 2012f
Wafer capacity (kwpy)
Source: Company, HSBC estimates
Production capacity, capex
Elpida’s 300mm wafer capacity comprises its
Hiroshima fab plus its 64%-owned Taiwanese
subsidiary Rexchip Electronics. In addition to
Rexchip, Elpida also outsources production to
Powerchip and will start to outsource to ProMOS
(PC DRAM) and Winbond (graphics DRAM).
Elpida’s relationships with Taiwanese makers
Elpida
64%
Rexchip
30.84%
Powerchip
ProMOS
Winbond
Source: Company – arrows indicate outsourcing flow
The relationship with Powerchip is waning as
Rexchip expands. Powerchip has c130kwpm
total capacity; 80kwpm is commodity DRAM,
of which 30kwpm is legacy production. We
expect Elpida to receive c40kwpm equivalent.
We believe Powerchip is also migrating to
4xnm, with one immersion tool expected by
the end of this year followed by another two
next year.
ProMOS is to start DRAM mass production
of 65nm-XS DRAM for Elpida after July
2010, with 35kwpm capacity. But we believe
ProMOS is currently having some yield issues,
so this timeline could be delayed. We believe
for Elpida, ProMOS will act purely as a
foundry.
Winbond started to produce graphics DRAM
in late-1Q10. We believe the number of
wafers it supplies is low, at c5kwpm.
For FY10e (March-2011 end), Elpida expects to
spend JPY115bn capex, of which 30% is
earmarked for Rexchip, which will require
JPY30-35bn to fully migrate its capacity to 4xnm.
60% is earmarked for the Hiroshima fab to
migrated half of its capacity to 4xnm. The
remaining 10% is for subsidiaries to expand wafer
testing and back-end fab facilities.
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