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Politics : Formerly About Applied Materials

AMAT 223.15

-2.4%

12:21 PM EST

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To: Proud_Infidel who wrote (37353)	9/21/2000 3:25:38 PM
From: Proud_Infidel	Read Replies (1) of 70976

Chip Price Recovery Seen Unlikely Concerns were mounting Wednesday at the fall of semiconductor prices, a major source of export income for Korea. The spot price for 64 MDRAM chips dipped 4.04% Tuesday to the US$6.41 to US$6.79 range, while 128 MDRAM also fell to below US$16. Reduced demand from computer manufacturers following a slump in PC demand, and overproduction by domestic and Taiwanese manufacturers were named as the culprits for the fall. Korea's export of semiconductor products was expected to reach US$25 billion with Samsung and Hyundaui exporting up to 1.5 billion units, so a dollar drop in price would have a major effect on earnings. Samsung and Hyundai have been negotiating with "big buyers" for a long term supply contract at a price 50 cents down on the previous month. Production cost of a 64 MDRAM chip is around US$4 so while the two will still maintain profitability, this will be reduced from initial targets. Samsung is to reduce the ratio of 64 MDRAM to below 20% of its non-memory chips, while Hyundai is to diversify into memory chips for mobile telephones.

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