Asian chip makers gear up

Asian chip makers are optimistic about the future

Several semiconductor makers in Asia are investing heavily in chip development, despite the recent slump in demand for personal computers, according to a Japanese business magazine.

The chip makers are optimistic about the future, says Nihon Keizai.

In Malaysia, two new chip factories will soon be opened, one of which is government backed. In total, the two units, 1st Silicon and Siltera, will be able to produce 50,000 chips a year.

United Microelectronics of Taiwan will also open a plant with a capacity of 40,000 chips per year. While in Thailand, Thai Microelectronics will start a factory this year with the backing of the government.

Lower chip prices

Some experts fear the investment could cause a glut in the market for chips, thereby forcing prices lower.

If this happens, the chip makers will be hit by a double whammy of falling prices and a shrinking market for their products. But consumers could benefit.

Falling processor prices have already helped make personal computers cheaper.

The first quarter of 2001 has been tough for chip makers. But some predict that the market will pick up in the next quarter.