NEC uses its own funds to build fab

Published: 14-Jun-2004


NEC Electronics, the world's largest maker of semiconductors for cell-phone screens, will use its own cash to fund additional chipmaking capacity that may cost more than 772m euros. "We have 1.5bn euros in cash so we can afford to build without raising additional funds," said Hiroshi Sato, senior vice president and chief financial officer of the Kanagawa prefecture-based company. NEC Electronics will add a factory to meet demand for its chips used in DVD recorders, cell phones and automobiles. Monthly capacity of 300mm silicon wafers will be increased to 14,000 units from 4,000. NEC Electronics said it will spend money on a new building to house the increased production capacity. Chip making equipment and cleanrooms needed to handle the chips will form much of the extra costs. The 98 billion yen raised when the company made its initial share sale last July, coupled with profitability in the business year ended March meant that "we are still cash rich", added Sato.

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