Glen,
Thats alot of reading there? Very tough for me to get through? Was it because I pulled the night shift? Or just a bad writer?
Has everyone noticed the SI improvements? Getting better by the day! Now you see instant responses to a post. May I be the first to link to this. Here are some responses to a post by Gary. I'm curious to see how this will work.
techstocks.com
I love technology! Is SI the best or what?
ok...here's an interesting development caused by the Asian crisis.
Suppliers Want Cash-Only Sales From Korean Chip Makers
(01/19/98; 9:35 a.m. EST)
By Jack Robertson , Electronic Buyers' News
SEOUL -- Foreign semiconductor material suppliers have put most South Korean chip makers on a cash sale only basis, throwing a temporary glitch into 16-Mbit production in this economically troubled country, according to analysts and DRAM competitors.
A spokesman for the parent of LG Semicon last week confirmed that the chaebol has been unable to secure overseas credit and it has been forced to pay cash for material needed to manufacture chips. Analysts and industry sources said the current banking crisis has left banks in that country short of foreign currency to issue letters of credit for imports of critically needed chip materials, such as packaging epoxy, wafers, headers and processing chemicals.
As a result of the banking crisis, Korean IC makers are forced to buy the essential chip supplies on a cash-only basis.
The LG Group spokesman claimed his company has been able to pay cash to acquire all the materials it needs to keep its chip production running without disruption.
A Samsung Electronics Co. spokeswoman in Seoul couldn't comment on whether the company was having to buy materials strictly on a cash basis. She said, "Samsung will do all that is required to keep our semiconductor business at full operation."
Foreign observers, however, are still stunned that some of the largest semiconductor producers in the world suddenly find themselves on a cash-only credit basis. The squeeze is made worse by the steep decline in the value of the won against the yen and dollar -- forcing the Koreans to spend far more of desperately short cash.
"It's hard to tell how much of a problem this is, but I suspect it could be one factor in the lower quantities of DRAMs the Koreans have been dropping into the spot market since the first of the year,"said Jonathan Joseph, principal semiconductor analyst for Montgomery Securities in San Francisco. Joseph said he believed the inability to get letters of credit to cover imported materials has perturbed some Korean production.
Interviewed in Germany last week, the president of Siemens AG's semiconductor division speculated that the credit crunch could be behind recent reports of slightly lower DRAM production levels in Korea . "But if this is so, it is only a temporary impact," Ulrich Schumacher added. "How long it lasts depends on how soon the Korean companies can get letters of credit again."
It is expected that when the current $40 billion short-term foreign debt is refinanced, the Korean commercial banks will again get access to the foreign currency needed to back letters of credit. However, unless Korea's won recovers significantly the nation's chip makers will still face a severe cost penalty in buying materials from foreign suppliers.
The supply pinch could give a boost to efforts in Korea to up a domestic infrastructure supporting chip manufacturing, suggested some analysts and industry sources.
For instance, LG Siltron, already a supplier of blank silicon wafers, has just opened a second plant in Kumi, Korea. That new facility will be able to triple production to 3 million wafers a year. LG Siltron had announced a further expansion to start construction this year to boost wafer output to 5 million wafers a year. However, that project could be caught up in the current Korean financial crisis, as the chip industry sorts out capital spending priorities while trying to pay off phenomenal levels of debt
Jeff |
