KGB existing customers, MICRON and SMIC are in expansion mode, directly benefit KGB.

 

 

 

 

Micron opens expanded flash memory facility in Singapore

By Calvin Hui  Posted 26 Sep 2016 14:48 Updated 26 Sep 2016 22:45

CHANNEL ASIA

BUSINESS

 

SINGAPORE: Chipmaker Micron Technology opened its new expanded 3D NAND flash memory fabrication facility here on Monday (Sep 26), which will substantially boost the company's capabilities to produce 3D NAND.

 

The technology is used in solid state drives (SSDs), which differs from spin-disk media drives. According to Micron, flash memory produced here can go up to a capacity of 2 terabytes (TB) and are used in devices like smartphones, laptops and servers.

 

Located at North Coast Drive, the Fab 10 facility was expanded at a cost of around US$4 billion (S$5.4 billion), which will be spread over a number of years.

 

Micron said it already has the capability to produce 3D NAND technology, but the increase of output at its expanded facility will be "substantial", although it declined to reveal numbers.

 

Output from this facility will meet majority of demand from Micron's global markets. Citing industry reports, Micron said a 75 per cent increase in global demand for SSDs is projected between 2015 to 2016.

 

Guest of honour, Acting Prime Minister Tharman Shanmugaratnam said Micron’s expansion demonstrates the opportunities presented by the exponential growth in the creation and use of data.

 

Mr Tharman, who is also Coordinating Minister for Economic and Social Policies, noted that Micron's partnership with the Government is an important one, with its participation in various national programmes, including the SkillsFuture Earn and Learn and Professional Conversion Programme for the wafer fabrication industry. 

 

Such partnerships are important for Singapore, he said. "These partnerships and investments in our people pay off over time," said Mr Tharman. "As a small, resource-constrained country, it is our human capital - and that’s each girl and boy, each man and woman, and the whole Singapore team put together - that gives us a role in the world.

 

"It is what motivates our national SkillsFuture initiative - helping everyone develop and deepen their skills though life, and at some points  learn entirely new bundles of skills." 

 

Micron CEO Mark Durcan, who was in town for the opening, said demand will be further fuelled by developments in things like autonomous vehicles and robots.

 

The company currently employs 7,500 people in Singapore, with 3,400 based at the North Coast Drive facility, and represent around 25 per cent of the chipmaker's global staff strength. Micron added that around 500 new jobs will be created with the new facility in place.  

 

- CNA/kk

 

 

 

SMIC To Build The World’s Largest 8-Inch Wafer Fab: 50% Upside Seen

 

    

By Shuli Ren

Barron's Asia

 

Semiconductor Manufacturing International Corp., or SMIC (981.Hong Kong), soared 3% in Hong Kong after announcing an expansion project for its Tianjin factory to become the world’s largest 8-inch wafer fab.

 

In addition to expanding the cutting-edge 8-inch wafer fab, SMIC last week held a groundbreaking ceremony for a new 12-inch wafer fab in Shanghai. Total investment in that fab will be close to 100 billion yuan ($15 billion), reported China’s state-owned Xinhua News Agency. China’s Ministry of Industry and Information Technology and the Shanghai government have given strong support for this project.

 

While investors are understandably concerned with rising depreciation expenses (as SMIC builds new factories, it’s got to incur more depreciation charges down the road), Nomura Securities believes these two projects can place SMIC to “become global no. 3″, competing against Taiwan’s TSMC (TSM) and Korea’s Samsung Electronics (SSNLF) (and Intel (INTC) of course). The broker this morning raised its price target to 1.50 Hong Kong dollars, or another 50% upside. Analyst Leping Huang wrote:

 

We think SMIC illustrated a clear capacity expansion plan in the coming years including (1) joint venture in Beijing/Shanghai with local government focusing on leading edge node (14nm/28nm), (2) 100% subsidiary focusing on high margin 8-inch and 12-inch mature node process (40/45nm, 65nm). We expect this approach can help SMIC to simultaneously tackling the top-line growth opportunities in leading edge as well as profit generation opportunity in mature node. Our analysis shows those capacity expansion plan will boost SMIC’s capacity by 250% if equipment are fully installed.

 

J-curve ROE improvement via operating leverage expansion. We forecast SMIC to maintain 23% CAGR revenue growth from 2016-2020F, driven by rising demand from Chinese customers. On the cost side, we expect SMIC’s EBITDA Margin to improve from 34% in FY15 to 43% in FY20F thanks to the improving operating leverage.

 

 

 

KGB double-digit growth in 2017 is not impossible.