Lam Research (LRCX, NASDAQ): To the Insiders Message Board

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Technology Stocks : Lam Research (LRCX, NASDAQ): To the Insiders

LRCX 159.33

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From: etchmeister	3/4/2008 1:00:40 AM
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Taiwan adjusts 12-inch fab construction goal on observed negative DRAM growth (kind of scary how many wafer fabs are located in Formosa; on really good shake could put the world into recession) Printer friendly Related stories Comments Email to a friend Latest news Bryan Chuang, Taipei; Esther Lam, DIGITIMES [Monday 3 March 2008] Officials from Taiwan's Industrial Development Bureau indicated that the government will no longer pursue its earlier targets set for 12-inch fab construction and will ease regulations in order to help Taiwan's DRAM industry amid an observed decrease in production value in 2007. According to estimates from the bureau, the production value of Taiwan's memory industry posted a 14% on-year decline to less than NT$250 billion (US$8.1 billion) due to severe oversupply. The officials noted that the government wants to help out companies by easing regulations covering the construction and target number of 12-inch fabs in Taiwan. The goal will be adjusted in accordance with industry trends, the officials said. Companies that have secured approval to construct new fabs are now allowed to complete construction of their fabs within four years after securing approval as opposed to the previous required time of three years. Taiwan currently has 11 12-inch fabs that are in volume production with 15 new fabs already planned. In light of the severe oversupply in the DRAM industry, the officials emphasized that the government is not encouraging the construction of any new fab or new capacity expansion. Projecting the DRAM price trend for 2008, the oversupply should weaken as PC sales are expected to grow by more than 10% on year, with a corresponding price rebound likely in the second half of 2008. While the oversupply of DRAM has prompted Taiwan's government to be conservative about new fab construction, the officials have an optimistic outlook for NAND flash. NAND flash should deliver stronger growth than DRAM. But Taiwan memory makers still lack of the flexibility to tune their capacity mixture between DRAM and NAND flash amid an absence of a complete patent portfolio, meaning that they can only cut DRAM output when exposed to a shaky price environment. Despite Taiwan memory makers progressing in the NAND flash sector, they still seem miles away from leading players, the officials said. They cited the joint-venture between Powerchip Semiconductor Corporation (PSC) and Rensas, and the joint development between Macronix International Company (MXIC) and Qimonda as examples of progress in the sector.

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