Until a couple of years ago, Philips Electronics NV’s chip business looked to be one of the industry’s basket cases, but the general surge in demand triggered by personal computer and cellular telephony booms has transformed the picture, and the company wins plaudits rather than boos when it heralds new investment these days. It said yesterday that it will invest over $485m in increasing production capacity for submicron wafers used in phones and multimedia at its chip plant at Nijmegen; the investment comes on top of the $345m announced in August 1994 and which is now being carried out. The Nijmegen factory is already the largest wafer fab in Europe and Philips’ largest wafer facility world-wide. Separately, Philips signed TriQuint Semiconductor Inc, Beaverton, Oregon to fabricate Gallium Arsenide cellular and cordless phone, wireless local network and base stations parts to Philips’ design. Philips will assemble and test, and market them. The announcement comes shortly after the company warned that lower-than-expected growth in the market for PC chips would mean a drop in profit in the first three months. Memory chips-makers like Korea’s Samsung and Micron Technology Inc have recently announced a focus on specialist chips.
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