NEC Electronics Corp. said it will spend ¥5 billion building a power chip factory to meet demand for semiconductors that control the flow of electricity.
The plant in Shiga Prefecture will be completed next October, NEC said Tuesday. The production line, the company's third for power chips, will help raise monthly output of 8-inch wafers 37 percent to 37,000 units by March 2009, it said.
Japanese producers, including Toshiba Corp. and Mitsubishi Electric Corp., are raising output as demand rises for semiconductors that consume less power and control electricity flow in electronics, cars and industrial machinery.
NEC, Japan's third-biggest chip maker, in August forecast sales of the chips to rise 39 percent in three years.
Sales of the chips that control distribution of electricity in mobile phones, power steering in cars and backlights in liquid crystal displays could rise to ¥115.5 billion in the year ending in March 2010, from ¥83 billion in the last business year, NEC said.
Toshiba, Japan's largest chip maker, said earlier this month it will invest ¥55 billion until March 2011 to increase output capacity at its new power chip factory in Kaga, Ishikawa Prefecture. The company's new plant started production this month.
Global sales of power-management chips will probably increase 60 percent to $39.9 billion in the five years ending in 2011, according to ISuppli Corp.