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Politics : Formerly About Applied Materials

AMAT 228.68

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To: Proud_Infidel who wrote (36984)	8/25/2000 10:14:38 AM
From: Proud_Infidel	Read Replies (1) of 70976

Part of the reason Japan's capex has not been great? Chipmakers Outsource Output to Overseas Firms August 25, 2000 (TOKYO) -- Japan's leading semiconductor manufacturers are increasingly outsourcing production of chips to overseas companies in locations such as Taiwan and Korea. Many aim to raise the volume of chips produced by overseas firms to 15-30 percent of their total output in two years, industry sources say. The items produced on consignment are mainly general-purpose products like memory and logic chips. Outsourcing enables the Japanese producers to flexibly cope with rapidly growing global demand for semiconductors, as well as reduce the capital investment risks posed by a possible weakening of the market in the future. Toshiba Corp. will increase DRAM output consigned to Taiwan's Winbond Electronics Corp. It will also make arrangements with a Korean and an Israeli manufacturer to have them produce chips on consignment. Through these moves, it plans to boost its outsourcing ratio from today's 7 percent to 25 percent in 2002. Mitsubishi Electric Corp. will start outsourcing production of high-margin flash memory chips for cell phones to Taiwan's Macronix International Co., Ltd. by year-end, becoming the first Japanese manufacturer to outsource production of flash memory chips. Mitsubishi Electric will also start consigning output of cell-phone logic chips to another Taiwanese manufacturer early next year. (The Nihon Keizai Shimbun)

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