Threaders, I have shares of wfr which I purchased at $26. WFR makes the Wafers for Texas Instruments, Mot, etc. and are the second largest manufacture in the World.
Right now according to the Dorsey Wright's Semi Sector they are LAST in the bell shaped curve.
Therefore, they should have good upside potential.
Following, is the E-mail I sent to Sam Duggan, the Stockholder rep. who
I met when I toured the plant in April, 87.
I though you may be interested in what he had to say and how it may
influenct AMAT.
Paul
> Subject:
> Re: Semiconductor & AMAT
> Date:
> Mon, 18 Aug 97 07:54:22 cst
> From:
> "Sam Duggan" <sduggan@memc.com>
> To:
> pvanhorn@sockets.net
>
>
> Paul,
>
> As you are aware, pricing for silicon wafers is very different than
> that of DRAMS. While the price of DRAMS fell by over 80% in 1996, the
> price of silicon wafers tends to fluctuate either up or down in the
> single digit range.
>
> Additionally, overcapcity in the DRAM industry does not equate to
> overcapacity in the silicon wafer industry.
>
> We have been making silicon wafers for 64 Mbit DRAMs for some time now
> and will continue to do so. We also will be making more sophisticated
> silicon wafers to accomodate the shrink in line widths.
>
> Best regards,
>
> Sam
>
>
> ______________________________ Reply Separator _________________________________
> Subject: Semiconductor & AMAT
> Author: pvanhorn@sockets.net at MEMCPSMTP
> Date: 8/18/97 12:47 AM
>
>
> Sam, Following was an interesting article regarding the Wafers and 0.25
> semiconductor. What impact will this have on MEMCE? I noticed that in
> the Dorsey Wright's semiconductor sector MEMCE is last in the bell
> shaped curve of all the semiconductor companies.
>
> Dr. Paul L. VanHorn
>
> > To: Scott Brooks (7425 )
> > From: Darin Lee
> > Aug 17 1997 9:25PM EST
> > Reply #7428 of 7429
> >
> > To All,
> >
> > 64-Mbit prices slip-sliding away
> >
> > New DRAM generation shows early signs of being cutthroat
> >
> > By Jack Robertson
> >
> > WASHINGTON--The economics in the global memory business may be
> > flying apart again.
> >
> > Many of the world's biggest chip makers that are just now
> > entering the 64-Mbit DRAM market may never be able to recoup
> > more than razor-thin profits at best, industry analysts now
> > predict.
> >
> > Some chip makers already agree. Bob Brown, president of Toshiba
> > American Electronic Components Inc., Irvine, Calif.,
> > expects that as the 64-Mbit market ramps up, it will be as
> > cut-throat as the predecessor 16-Mbit generation.
> >
> > In fact, it's already happening. Prices for the 64-Mbit DRAMs
> > have already plunged 40% in the past year, a product stage
> > when margins are the fattest and producers expect to recoup big
> > chunks of their capital investment. Brown estimated that the
> > big chips are now selling for less than $40 each, and are still
> > falling.
> >
> > The same price trend is being tracked by American IC Exchange,
> > whose spot market prices for 64-Mbit memories are
> > considered to be running within a dollar of the contract market.
> > The Aliso Viejo, Calif., middleman said in early August that the
> > 64-Mbit chips have fallen to new lows every week for two months.
> > On Aug. 1, these spot prices averaged $35-to-$36 each.
> >
> > That kind of news means that producers will have to accelerate
> > product shrinks so they can get more of the 64-Mbit die out of
> > an 8-inch wafer to boost yields and cut costs.
> >
> > In the 64-Mbit DRAM shrink race, many chip makers are now rushing
> > into 0.25-micron process technologies earlier than
> > expected in hopes of undercutting their competitors' prices
> > sooner. Quarter-micron processes originally were targeted for
> > next-generation 256-Mbit DRAMs, according to the Semiconductor
> > Industry Association's Technology Roadmap.
> >
> > But the economics just aren't cooperating. Deep UV quarter-micron
> > fab equipment is substantially higher in cost -- just shy of
> > being twice as expensive by most estimates. Industry analysts
> > such as Jonathan Joseph of Montgomery Securities in San
> > Francisco, as well as some chip executives, now say that the
> > lower 64-Mbit prices will make it extremely hard for chip makers
> > to recover this high capital investment.
> >
> > Nevertheless, DRAM producers have little choice but to move more
> > quickly into quarter-micron wafer lines if they want to
> > have high-enough yields to be competitive in the market. Some
> > chip executives, however, warned that memory firms that
> > haven't made the jump yet into 0.25-micron lines may be to late.
> >
> > "If you don't have a quarter-micron wafer line installed right
> > now, you've missed the 64-Mbit window," declared John Kelly,
> > vice president of technology for IBM Corp.'s Microelectronics
> > Division.
> >
> > Fabs that already have 0.25-micron 64-Mbit production lines
> > running will get far more yield so will be able to underprice any
> > rival trying to enter the market now using 0.35-micron processes.
> >
> > It may even be too late to build a new quarter-micron fab.
> > "Anyone starting now to build a new quarter-micron wafer fab
> > won't
> > be coming on line with even low initial yields for more than a
> > year" added the IBM vice president. This would be "well after
> > present quarter-micron 64-Mbit DRAM producers are far down the
> > learning curve and starting to move to 0.22-micron wafer
> > processing." he said.
> >
> > "A DRAM producer will also need the quarter-micron production
> > line to get high-enough yields to remain profitable at the
> > [expected] low market prices," added Montgomery Securities'
> > Joseph.
> >
> > Samsung Electronics Co. is ramping up as quickly as possible with
> > two quarter-micron wafer fabs, sources said. Siemens
> > Semiconductors expects to be using quarter-micron lines to
> > produce all of its 64-Mbit chips by the end of next year.
> >
> > Dominion Semiconductor, the IBM-Toshiba joint venture in
> > Manassas, Va., will come up this November with quarter-micron
> > lines for its 64-Mbit DRAM production. IBM and Toshiba each have
> > their own separate quarter-micron fabs there to produce
> > 64-Mbit DRAMs. NEC also is expecting to transition quickly to
> > 0.25-micron wafers for 64-Mbit DRAMs.
> >
> > But with or without quarter-micron fabs, 64-Mbit DRAM producers
> > are having to face diving prices before the market takes
> > off. This is unlike previous generations of DRAMs where producers
> > charged premium prices as each new generation ramped
> > up. This allowed vendors to recoup much of their investment in
> > the early stages of the market.
> >
> > But this time around, newcomers ramping up DRAM lines are pouring
> > in more supply than the current limited niche market of
> > servers and high-end workstations can absorb, pointed out
> > Montgomery Securities' Joseph. Prices of 64-Mbit chips have been
> > falling at the rate of 12%-to-15% a month since early spring,
> > according to the American IC Exchange.
> >
> > The expected explosion in 64-Mbit DRAM sales will come only when
> > their prices reach parity, or a four-times crossover
> > price, with the older 16-Meg products. But prices have fallen so
> > rapidly that the crossover is not expected to be reached now
> > until 64-Mbit prices fall to the $24-to-$28 range.
> >
> > Only those vendors that can turn out mass quantities of low-cost
> > 64-Mbit chips are likely to make any profit, thin as it may be,
> > to help depreciate their huge fab investments, forecast A. A.
> > LaFountain 3rd. an analyst with Dominick & Dominick. DRAM
> > companies may fare better over the long haul if they can weather
> > this initial 64-Mbit price war. That's because the much of the
> > heavy capital investment in quarter-micron wafer fab gear is
> > expected to carry them with relatively modest upgrading through
> > the next generation 256-Mbit part and even perhaps through the
> > initial stages of the 1-Gbit DRAM generation.
> >
> > Sematech and chip manufacturing experts now predict that the
> > deep-UV equipment now being installed to make
> > quarter-micron wafers can be modified without a lot of additional
> > expense to work down to a 0.18-micron chip design. Right
> > now, the SIA roadmap labels 0.18-micron feature size as the
> > process for the 1-Gbit DRAM generation. |
