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To: Logain Ablar who wrote (22442)	7/9/1999 10:55:00 AM
From: Ian@SI	Respond to of 25960

Taiwan Chip Makers' June Sales Confirm Semicon Rally By DERMOT DOHERTY TAIPEI -- Taiwan's semiconductor companies continued to notch up solid revenue growth during June, providing further evidence that the chip industry is emerging from its recent slump, analysts said. "For the most part, expectations were pretty high, and they met them," said Peter Tsao, head of regional technology at ING Barings in Taipei. "(The recovery) is not going to fizzle out over the short term...the cellular phone industry is pretty strong, and the PC business is picking up." Foundries, or contract manufacturers, maintained their robust growth of the past few months amid an increase in outsourcing from integrated device manufacturers and a recovery in the overall industry, analysts said. Growing demand for communications-related chips has also fueled growth in sales, managers in the industry said. Sales for Taiwan Semiconductor Manufacturing Co. (TSM), the world's largest pure chip foundry, surged to a monthly record high of NT$5.73 billion (US$1=NT$32.283), up some 2% on the month, and up 90% from the prior year. United Microelectronics (Q.UME), meanwhile, the island's second biggest chip maker, recorded a 95% jump in sales during June to NT$2.36 billion from NT$1.21 billion in the previous year. That amounts to a 4.4% increase from May's levels. "The foundry industry is moving along pretty much as the market expected," said Will Asato, a chip analyst at Barits Securities in Taipei. "And June sales were an indication of what everyone was looking for." DRAM Prices Begin Recovery Memory chip makers, too, posted strong growth in revenue last month, despite weak pricing for dynamic random access memory chips. "The demand is always growing strongly," explained one analyst at a foreign brokerage in Taipei, who asked not to be named. "The problem is with (over)supply." Even so, DRAM prices have been rebounding over the past week, analysts noted, as companies have cut back on output given the lack of profitability in the sector in recent months. And with inventory levels now quite low, memory chip distributors are starting to stock up amid expectations that prices will continue to recover during the second half of the year, they said. Over the past week, the price of an eight-inch, 64-megabit DRAM chip has jumped to US$4.50 from US$3.80. The consensus among local industry experts is that DRAM prices have indeed bottomed out, and are unlikely to plunge anytime soon. "When DRAM prices fall, they tend to continue to fall. And when they rise, they continue to rise," said Barits Securities' Asato. "We're cautiously optimistic on DRAM." Winbond Electronics Corp. (Q.WBE), which makes both logic and DRAM chips, recorded a 94% surge in sales in June to NT$1.93 billion from NT$995.3 million in the previous year. Sales for Vanguard International Semiconductor, meanwhile, a 27%-owned affiliate of Taiwan Semiconductor, jumped 148% during June to NT$1.03 billion from NT$417.1 million in the prior year. Optimism regarding the chip industry was obvious on the local bourses on Friday. Vanguard's stock closed up 5.2% at NT$30.40 on the over-the-counter market, while Winbond surged by its daily limit of 7% to NT$43.50. -By Dermot Doherty; (8862) 2502 2557; ddoherty@ap.org