Infineon Technologies AG announced a capacity expansion at its Virginia subsidiary semiconductor plant, Infineon Technologies Richmond, LP. The company is sure that the demand for DRAM will uptick within the next years.

The expansion will begin with an initial equipment move in to start production of advanced DRAM chips on 300mm wafers beginning in early 2005. The $1 billion expansion project will increase Infineon’s flexibility and responsiveness to customer requirements for its memory and logic products.

After completion of the initial expansion, the site will be capable of processing 25 000 wafer starts per month in 300mm technology. With operations scheduled to begin in early 2005, the initial build out also will give Infineon the option to ramp up additional capacity rapidly if and when it is required by market conditions.

“Overall customer demand - both for logic as well as memory chips - is increasing at a strong pace. This initial expansion of capacity at Richmond will allow us to accelerate the shift of production from memory to logic products at our 200mm plant in Dresden,” said Dr. Andreas von Zitzewitz, Chief Operating Officer of Infineon Technologies.

The Infineon Technologies Richmond plant was founded in 1996 as White Oak Semiconductor, and began manufacturing memory IC products in August 1998. Construction on the 300mm plant expansion began in 2000, but its completion was delayed as a result of economic conditions. The plant produces DRAM chips used in personal computers, computer servers and other advanced electronic devices.

“We are leveraging the existing building shell and synergies gained with the experienced staff at Richmond to quickly bring 300mm capacity on line in a way that is consistent with our corporate capital expenditure plans. The excellent infrastructure and state-of-the art manufacturing expertise at Richmond make this the fastest and most cost effective way for us to respond to changing market conditions,” Zietzewitz said.

The 300mm production module will initially produce high performance and high density DRAM chips using 110nm technology, with a fast transition to 90nm devices. Infineon will continue to operate the 200mm module now running at full capacity at the Richmond site. When the initial expansion project is complete, the 25 000 300mm wafer starts will more than double total capacity for DRAM at the Richmond site. At the same time headcount is expected to increase by 800 employees from the current 1750 employees to approximately 2550. Future decisions regarding the next phases of expansion, timetable and total investment in the increased capacity will be determined in response to developing market requirements.

It remains to be seen how the fab expansion affects Infineon's strategy to outsource its DRAM chips production to Asian makers in exchange for process technology.