02.22.2001
ProMOS migration to 0.17um progressing slowly

• ProMOS (5387 'Mao De') admitted at yesterday's analysts' meeting that yield on 0.17um processing still remains low, and expects to achieve 80% yield by March. ProMOS began migration to 17um in 4Q00 and failed to improve yield to 80% by end-2000, the level of production efficiency for last generation 0.20um.

• The delay will impact 1Q01 revenue, along with ASP decline as a result of the DRAM spot price slump. We expect February revenue to stay flat and March revenue to increase 10%, assuming a QoQ 10% ASP decline given recent stability in the DRAM spot price.

• While ProMOS's 0.17um yields 1,000+ (64 Mb equivalent) gross dies, Powerchip's (5347 'Li Jing') 0.18um yields 844 dies. However, Powerchip's ramping plan is progressing more smoothly and has been maintaining a 75-80% yield since end-2000. We regard Powerchip as the current cost leader in Taiwan, with an estimated die cost of US$1.85.

• ProMOS will become the first DRAM maker in Taiwan to ramp up 300mm (12-inch equivalent) operation. Equipment move-in is expected in May/June, and volume production from September. The company is bullish on ramping schedule, citing that its technology partner Infineon (with a 34% holding in ProMOS via Siemens) has been conducting intensive R&D on 300mm for over 3 years.

LindaLiu@Primasia.com +886-[0]2-2547-8867