More DRAM inflicted pain and suffering, this time Taiwan:
A service of Semiconductor Business News, CMP Media Inc.
Story posted at 3:15 p.m. EDT/3:15 p.m. PDT, 8/28/98
Acer, Mosel-Vitelic become victims of Taiwan's chip slump
By Sandy Chen
TAIPEI, Taiwan -- It's going from bad to worse in Taiwan. Acer
Semiconductor Manfuacturing Inc. (ASMI) and Mosel-Vitelic Inc. are
the latest chip makers in the island country to announced
lower-than-expected financial results in 1998.
Battered by a slowdown and pricing pressures in the memory market,
Mosel-Vitelic revised its 1998 sales and profit projections downwards
by an estimated 29.3%, and 86.5%, respectively.
The DRAM maker expects its 1998 sales to reach only $373 million in
1998, compared to $527.3 million in its original forecast. The
company's net income will is expected to be just $7.9 million, compared
to the original forecast of $58.6 million.
In the first half of 1998, however, Mosel-Vitelic's sales grew by 39.2%
to $139.3 million, compared with $100.1 million in the like period a
year ago. But the company reported a loss of $18.6 million in the first
half of this year, compared to a profit of $37.8 million in the same
period a year ago.
"The main reason [we revised our forecast] was that DRAMs prices did
turn out to be what we had expected,'' said William Chen, executive
vice president of Mosel-Vitel. ''Margins also went down, but our sales
are still growing.''
Meanwhile, Hsinchu-based AMSI, the new IC-wafer foundry
subsidiary of Taiwan's Acer Inc., revised its 1998 sales forecast
downwards by 54.3%, while also projecting more red ink.
The company originally projected sales of $371.8 million and a loss of
$34.6 million in 1998. Now, Acer Semiconductor said its sales will only
hit $170 million, with losses expected to reach $141.2 million.
In the first half of 1998, ASMI reported sales of $86.5 million, a 43%
declined compared to $151.7 million in the like period a year ago. It lost
$92.2 million in the first half of 1998. In the same period a year ago, it
reported a loss of $19.2 million.
"ASMI is in transition, so our production was less than what we
expected," said a spokesman for the company. ASMI is shifting its role
from a pure DRAMs maker to a multiple role as both an independent
design manufacturer (IDM) and foundry.
Analysts said ASMI and Mosel-Vitelic are the victims of a DRAM
downturn. "The main reason why these companies adjusted their
forecasts was because of a drop in DRAM prices,'' said Fred Lin, fund
manager for China Securities Investment Trust Corp. in Taipei. "The
revised forecast among those companies is more realistic.''
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