NEC to boost chip spending by one third

In a move to stay competitive as digital and multimedia applications drive a rapid expansion in the chip market, NEC has announced aggressive plans to increase by 33 per cent the amount of money it spends on its chip- making facilities this year.

In the next two to three years, the company expects to see strong growth as a result of the rollout of third-generation wireless and mobile terminals, said NEC president Koji Nishigaki, who announced the planned increase during the opening of the company's newest chip fabrication plant.

In the current fiscal year, which started on April 1, NEC plans to invest a total of $3.1 billion (200 billion yen) in its chip facilities, up from $2.4 billion in fiscal year 1999, Nishigaki said. More than half of the investment will be distributed among the company's five factories in Japan.

The Kyushu plant in western Japan will see an investment of $586 million to equip it to produce a chip for the new Nintendo games console that will be launched later this year. Investment will almost double at the Hiroshima plant to $356 million to fund an increase in wafer production from 26,000 a month to 30,000 a month and a move from 0.18 micron to 0.15 micron technology.

NEC's Kansai plant will see investment jump to $539 million to fund a new production line for LCD (liquid crystal display) driver chips, the Yamaguchi plant will receive $71 million, and the Yamagata plant, where Nishigaki was speaking, will receive $317 million in investment in the coming year.

Overseas, US operations will receive $95 million, UK operations will get $158 million, the company's Irish plant will receive $79 million, investment in Singapore will be $40 million, Malaysia will get $23.7 million, investment in Indonesia will be unchanged at zero, NEC's Beijing plant will receive $71 million and NEC Shanghai will get $475 million to fund an increase in output from 10,000 to 20,000 wafers a month.

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