Hi Carl, actually, I was refering to Charter Semi which is in Singapore. I was mixing references between foundries and wafer manufs. In some cases, they are practically the same.
I don't have any direct information about the relatve levels of pain in the business right now, but a number of inferences can be drawn from site observations and the public record.
1) WFR seems to be OK in terms of cash on hand, but has instituted draconian cost controls, like cancelling most service contracts, dumping temps and regular employees, shutdowns and the like. They remain committed to 300mm and R&D spending has suffered less than production. Pain level - high
2) SEH has not shutdown production nor laid off extensive numbers of employees, at least domestically. Capital equipment spending has been cut and some deliveries pushed out. 300mm commitment intact, service cntracts selective coverage. Pain level - moderate.
3) Sumitomo is buying equipment, upgrading some equipment, hiring very selectively. Seems the least presently concerned about 300mm.
Pain level - low.
I suspect this is an accurate indication of cost structure. No one appears to expect a turnaround in demand before Q2 99. Everybody has a hoard of cash sufficient to ride out the trough. Sumi and WFR are neck and neck in terms of most modern plant. Improving utilization when demand returns will benefit them more than it will SEH. WFR has more installed capacity than Sumi, especially in the higher margin epi capacity. Right now, SEH is #1, WFR #2 and Sumi or Wacker #3. SEH will likely lose some share to WFR, especially if the rumors are correct and WFR gets big business from INTC.
WFR's total profitability picture will improve dramatically by Q4 99, thus Ze'ev's prediction of $4/share still has a reasonable chance.
olduvai5 |
