Applied Materials No-Politics Thread (AMAT) Message Board

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Technology Stocks : Applied Materials No-Politics Thread (AMAT)

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Dec 24 12:59 PM EST

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To: Kirk © who wrote (2964)	9/9/2002 8:13:10 AM
From: Proud_Infidel	Read Replies (1) of 25522

Taiwan Semicon: Business Still Seen Slow For 3-6 Months Monday September 9, 12:32 am ET TAIPEI -(Dow Jones)- -The chairman of Taiwan Semiconductor Manufacturing Co. , the world's largest chip foundry, Monday reiterated that the business outlook for his company remains slow for the next three to six months. Morris Chang told a Goldman Sachs-sponsored investors conference via a teleconference in Shanghai that his outlook of a slowdown in the next few months hasn't changed. Chang had said during an earnings conference in July that he saw the semiconductor sector turning weaker. He also said that TSMC's capacity utilization rate would slide in the third quarter to the low 70% range from the second quarter's 85% and the average selling prices of its goods would also decline. Chang also told investors in Shanghai that in the coming decade, the compounded average growth rate for the semiconductor industry will be about 10%, which is down from the 12% average over the past two decades. For foundries, the rate will be about 20% for the next 10 years, due to increased outsourcing by fabless and integrated device manufacturing companies. He said that ideally a chip company's capital expenditure should be at or below 30% of its revenue. Looking ahead at the industry's future, Chang said there will eventually be just one or two profitable foundries - which are dedicated to making chips for clients. The remaining chip foundries will be small and struggling, due to high entry barriers, which include transitioning into advanced 300-millimeter wafer size technology, the cost of research and development, and the need to establish design infrastructure such as electronic design automation and developing intellectual property. By the spring of 2003, TSMC will be ready for pilot production using technology for circuitry with 90 nanometer line-width.

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