$4.8b memory-chip plant delayed till next year

THE opening of a $3US.5 billion ($4S.8 billion) plant in Singapore to make cutting-edge memory chips has been delayed - the latest casualty of the global semiconductor industry slowdown.

The high-tech factory, a joint venture between technology heavyweights Micron and Intel, had been due to open later this year, but this has been set back until the middle of next year.

The joint venture, known as IM Flash Technologies, will make solid-state memory chips for MP3 players and portable storage devices.

The delay was announced yesterday by IM Flash Technologies' executive officer, Mr Rodney Morgan.

The plant in Bendemeer Road is one of the biggest-ever investments in Singapore's electronics industry.

Despite the delay, the company said it remains committed to the project. It has already hired 800 staff members, of whom 500 are now in the United States undergoing training, to operate the plant when it is open.

Construction of the plant is currently under way.

Mr Morgan was speaking at a press conference launching the annual Semicon Singapore conference at Suntec Singapore yesterday.

The company had decided to hold back the plant as the 'supply for memory chips has outrun demand', resulting in lower profitability.

Mr Morgan said current memory chip prices are about 55 per cent lower than what prices were earlier forecast to be by now. He did not specify the source of the forecast.

Global economic uncertainty, which has further strained the supply glut, has not been helping the situation, he said.

The semiconductor sector contributed 15 per cent of Singapore's manufacturing output for last year, and accounts for close to 10 per cent of global semiconductor output. About 40 integrated circuit design firms, 14 silicon wafer fabs and 20 assembly and test houses operate in the Republic.