Hynix bets heavily on 30-nano technology

By Kim Yoo-chul

Hynix Semiconductor is planning to bet heavily on advanced chips that apply its finer 30-nanometer processing technology, attempting to better compete with rivals such as Samsung Electronics and Japan's Elpida.

The outlook continues to be murky for the chip industry due to the bloating inventories caused by chipmakers increasing their production capacity in previous months.

However, Hynix believes it can't afford to take its foot off the gas pedal in terms of investing in facilities and enhancing its technologies as it looks to reduce its gap with market-leading Samsung.

Last week, Hynix said it will increase its investment in facilities by 10 percent from its earlier plan of 3.38 trillion won ($2.97 billion) to accelerate its transition to "thinner" processing technologies.

The semiconductor chips of today have millions of minuscule electronic circuits, which are etched into a silicon disk on a nanometer (one billionth of a meter) scale.

A smaller measurement means that the chip circuit consists of thinner electric lines, thereby having more circuits and storage in the same amount of space.

Hynix is one of the companies that are intending to migrate to thinner technology in chip production as its technological advantage allows it more room to cut production costs in the cyclical and volatile chip industry.

This will also be crucial for responding to the expected increase in the demand of chips for next-generation digital devices such as tablet computers, a market ripped open by the Apple iPad.

"Our additional investment in cash will be used to ramp up the production of our 30 nanometer class memory chips," said Hynix spokeswoman Park Seong-ae.

Hynix plans to produce chips based on the 30 nanometer technology from January next year.

The company has been facing stronger competition from Samsung, which began producing DRAM chips in July.

Elpida, the industry's No. 3 player behind Hynix, is planning to mass produce chips from its 30-nanometer line from December.

"We are investing early in this area to meet the expected demands in chips for advanced mobile devices like smartphones and tablet computers," Park said.

The recent announcement by Hynix comes at a time when the global DRAM industry seems to be entering a downsizing phase.

With major PC makers including Hewlett-Packard and Dell of the United States decreasing orders amid market uncertainties, the price of the industry’s benchmark DRAM chips fell by more than 20 percent in late September from several months ago.