And from Malaysia we have this. Jeff
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BUSINESS TIMES (MALAYSIA): LOCAL CHIPMAKERS SEE NO SLOWDOWN IN PRODUCT DEMAND
94% match; Business Times (Malaysia) ; 17-Aug-2000 12:00:00 am ; 457 words
By DAVID SPARK
THE world's cooling passion for high-technology over the last two months has put immense pressure on share prices of semiconductor makers, amid news of sliding profits and falling demand.
But local chipmakers have always known their worth. They see no slow- down in demand for its products, and is pumping up production capacity in response, industry observers said.
Malaysian Pacific Industries Bhd and Unisem (M) Bhd are investing hundreds of millions of ringgit in expanding their production capacity, and they are not alone.
Two multinationals - Motorola and Infineon Technologies - recently announced major capital investment to expand their operations here.
Vice president and country manager of Motorola Malaysia, Datuk Ramli Abbas, said that he disagrees with talk that its two core businesses, the wireless communications and semiconductor sectors, are slowing down.
Motorola will pour RM300 million over the next five years into building an integrated facility in Penang while Infineon will spend RM2 billion on lines that will allow it to make 25 billion memory chips - more double its current 10 billion chip capacity.
Both multinationals maintain they have strong confidence in Malaysia's investment climate and the future growth of the semiconductor industry.
Infineon Technologies Malaysia, a unit of German giant Siemens AG, on Tuesday unveiled a RM2 billion plan to expand its Malacca operations, which makes high performance semiconductors and DRAM memary chips used in the communication, automotive and computer industries.
The plan includes the setting up of a new manufacturing plant in the Krubong Industrial Estate and extentions to its existing factory in the Batu Berendam Free Trade Zone.
Just the day before, Motorola Malaysia said it will invest RM300 million over the next 5 years to build its Motorola Penang Technoplex, an integrated facility to make wireless communication and energy products.
It was just weeks ago that depressed share prices of the country's listed chipmakers provided opportunity for both to buy-back shares at bargain prices. Shares of both MPI and Unisem felt the brunt of a recent selloff on technology stocks which pressured their prices significantly.
But MPI, which recently embarked on an aggressive buyback programme, says it will continue to pick up undervalued stock.
"Current prices are outrageously, ridiculously low," said managing director David Edward Comley in a recent interview. At the time, MPI was trading below RM28, a level not seen since last December. He said the company will continue its strategy of buying back shares when the price falls below RM30 each.
The company has now more than 8 million shares retained in its treasury as a result of its buybacks.
In July, MPI bought a total of 639,000 shares from the open market for a cumulative RM18.45 million at prices between RM26.50 and RM34.25. A month later, MPI bought another 203,000 shares for RM5.76 million at between RM27.25 and RM29.50.
Investors seem to have responded to this bullish signal from MPI's management as its share price has since recovered, and closed at RM32.50 yesterday.
Unisem is now considering the same strategy, too. Its chairman Datuk John Chia says the company will make the proposal at "an appropriate time", although he declined to say when. Unisem ended at RM20.30 yesterday.
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