Invest in TaiwanDepartment of Investment Services, MOEA
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Infineon, the famous Munich-based semiconductor company, has cultivated its Taiwan market more deeply than almost any other. Over the past decade Infineon has continuously added Taiwan investment, becoming a model for foreign semiconductor investors on the island.
Infineon, one of the three biggest semiconductor companies in Europe, is without doubt among the top global semiconductor manufacturers that have cultivated their business in Taiwan most deeply.
The company has grown at an awesome rate in the past few years. In 1995 it held no better than 15th place in the global market, with a share of approximately 2%. By 2002 and 2003, however, its global ranking had soared to sixth place and its share of the market had grown to 3.4% and 4%, respectively, in those years. In just eight shore years, Infineon had grown two-fold.
And this has by no means satisfied its ambition. The company predicts that it will have 6% of the world market by 2007, moving it up to second place in the rankings.
Taiwan constitutes an important part of Infineon's continuously and rapidly expanding business territory. The semiconductor firm has poured more investment into the island time after time-and time after time, it has reaped a rich harvest for its efforts. It has, in fact, become a Taiwan investment model for other large semiconductor firms all over the world.
The prime target of our development in Taiwan,
notes Infineon's President & Amanagement Director, Loh Kin Wah, is to grow at an annual average rate of 30% in this market over the next four years, and to become one of the island's top three semiconductor suppliers
. Loh goes on to say that his company will continuously reinforce its memory product line, through joint ventures with Taiwanese semiconductor makers, so as to provide total solutions that satisfy the needs of different customers. At the same time, the company will keep striving to expand its share of the market for non-memory products and total solutions.
Infineon's investment activities in Taiwan have always attracted intense attention, and Loh reports that over the coming three years the company will further expand its investment on the basis of its current cooperation with Taiwanese enterprises.
The main focus of this investment will be on Inotera Memories, a 50-50 joint venture with Nanya Technology. The two partners have invested US$2.2 billion in the construction of Inotera's DRAM memory chip plant, which is specializing in the production of standard 12-inch silicon wafers for memory chips with the aim of achieving 25% of global DRAM production capacity. This is a strong indication of Infineon's firm determination to continue cultivating the DRAM industry.
Ground was broken for construction of the Inotera plant in December 2002. Construction of the clean room and installation of equipment sets were completed last year, and the plant's first 12-inch wafer using 11-micron trench technology was produced in April this year. Progress is now under way toward the target of producing 24,000 wafers per month by the end of this year, and a monthly production of 540,000 wafers is expected to be achieved by the end of 2005.
Loh reports that Infineon and Nanya Technology have further cooperated in developing90- and 70-nanometer production technology, and that the two companies have also worked with Winbond in expanding production capacity for memory products. These efforts and results, like many others, reflect Infineon's ambition to develop and progress along with Taiwan.
In January this year the company also announced its purchase of the semiconductor design firm ADMtek, its first procurement in Asia, a strategic move undertaken at a cost of 80 million euros (equal to more than NT$3 billion) to reinforce Infineon's communications-related business. Infineon will use ADMtek to set up a new entity, dubbed the Infineon-ADMtek Co., to engage exclusively in the development of customer premises equipment (CPE) chops.
In addition to its joint ventures and acquisitions, Infineon plans the possible further deepening of its Taiwan roots through the establishment of an R&D center on the island. Under the strenuous efforts of the Ministry of Economic Affairs to seek out multinational enterprises to set up such facilities, Infineon is considering the possibility of building a technology development center of its own on Taiwan. This is another strategic move that has drawn intense attention on the island.
Loh says that in all of its areas of business, Infineon's performance assures it an important global position. In the field of security and the IC card market, for example, it is No. 1 in the world; in chips for automobile use it is No. 2, and in memory products it is firmly in third place. In the process of Infineon's future growth, Taiwan will be one of its most important strategic partners.
To emphasize the importance which it places on the Asia-Pacific region and the Taiwan market, Loh notes that even as his company works hard to provide total solutions to customers on the island it will also promote cooperation with its Taiwanese strategic partners in the computer, communications, and other fields.
In speaking of Taiwan's key position, Loh noted that the island's market is among the fastestgrowing in the Asia-Pacific region. The growth of Infineon's own sales in the Asia-Pacific reached 40% in 2003, boosting the company from eighth to sixth place among semiconductor suppliers in Asia, and Taiwan played an extremely important role in this performance. The company hopes that the advantages of the island's market will help speed up the achievement of its Agenda 5-to-1
-- a five-year plan involving five strategic subjects, initiated in 2002, that aims to boost Infineon to fourth place among the semiconductor suppliers of the world with 6% of the global market; to a position among the three biggest suppliers in each area of service; to a position among the top two semiconductor companies in financial performance; and to the No. 1 spot globally in the supply of total semiconductor solutions.
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