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Politics : Formerly About Applied Materials

AMAT 327.03

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Jan 16 3:59 PM EST

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To: Robert O who wrote (31834)	8/11/1999 12:18:00 PM
From: Proud_Infidel	Read Replies (1) of 70976

200mm Wafer Input Hits All-Time High; Concern Over Short Supply Grows August 11, 1999 (TOKYO) -- Input of 200mm wafers at semiconductor makers worldwide hit an all-time high in April for the second consecutive month, according to a Nikkei Market Access survey. At the same time, wafer supplies are becoming tight. Contrary to the rebounding wafer input, wafer makers' production capacity has been declining because of manpower shortages and intensifying requirements for precision technology. Shipments have reached the limit of the output at present. The 200mm wafer input slumped in 1998 after achieving a new high in October 1997. Wafer makers then engaged in price competition to keep their production lines operating. Wafer prices dropped about 40 percent in 1998. Restructuring spread among wafer makers from the second half of 1998 to early 1999 to tackle the deteriorating business results. Also, intensifying market requirements for wafer flatness to cope with process technology innovations have reduced wafer yields. Wafer input recovered in 1999 thanks to growing demand for LSIs for use in mobile telephones and other products. However, production capacity of wafers has been declining because wafer makers can increase neither manpower nor manufacturing equipment. Wafer makers cannot afford to invest, and the prospect of improvement in production capacity is still uncertain. Worldwide concerns about the shortage of wafers and semiconductor chips will grow until wafer makers have started their next round of investments. Appropriate allocation of wafers on a worldwide basis will become necessary to cope with the problem that the production of microprocessors will cause a shortage of wafers for other semiconductor chips. The shortage of wafers with a diameter of 150mm or less is more serious. Production lines that can handle these wafers are being phased out. In addition, to raise profitability, wafer makers are transferring manpower to production lines that can handle larger wafers. The prices of small wafers are rising in some regions. In the wake of that, negotiations already have started to raise the prices of 200mm wafers. (Nikkei Market Access)

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