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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: John Chen who wrote (31582)	7/23/1999 6:30:00 AM
From: Duker	Respond to of 70976

INTERVIEW-Toshiba welcomes DRAM market recovery By Miki Shimogori Friday July 23, 5:16 am Eastern Time OYAMA, Japan, July 23 (Reuters) - Leading Japanese chipmaker Toshiba Corp said on Friday a recent recovery in the global chip market would help its earnings, but it would not alter its plan to boosting outsourcing of its chip output. Toshiba President Taizo Nishimuro told Reuters in an interview that the current rise in the spot prices of the mainstay 64-bit computer memory chips, known as dynamic random-access memory chips (DRAMs), would be favourable for its business. The spot price for 64-megabit DRAMs currently stood at $5.5, up from a recent low of around $4.5, and a rise would later affect the prices for chips supplied via OEM, he said. ''The current increase in the spot market price will be felt favourably on our balance sheets,'' asid Nishimuro. But he said the market recovery would not change the company's plan to shift about 40 percent of its annual chip output to overseas firms by fiscal 2001. Toshiba has said it aims to raise overseas production ratio to 40 percent of its total chip production, to be worth about one trillion yen by fiscal 2001, in order to save on capital investment and enhance price competitiveness. It has said it plans to outsource some of its chip production to overseas firms such as Taiwan's Winbond Electronics Corp , Worldwide Semiconductor Manufacturing Corp, and Chartered Semiconductor Manufacturing Ltd of Singapore. The chairman of another major chipmaker, Hitachi Ltd , Tsutomu Kanai, said in a separate interview with Reuters that he had recently seen a heating up in demand for semiconductors, but that the outlook for global chip prices still hinges on how foreign chipmakers would boost its chip production. Hitachi recently joined forces with NEC Corp , dubbed one of the global DRAM Big Four along with Micron Technology of the United States and South Korea's Samsung Electronics and Hyundai Electronics Industries. Hitachi and NEC unveiled an alliance that includes a possible joint venture to develop new DRAM chips, which they said was aimed at sharing hefty development costs. Kanai said the two firms would share output lines for the new DRAM chips. Toshiba, meanwhile, has forged an alliance with Fujitsu Ltd to jointly develop next-generation chips, with the goal of launching one-gigabit DRAM chips by March 2002. Nishimuro said their alliance at this moment does not include any joint production plans, adding that such issues will be taken into consideration by the time output is due to start in 2003. On the foreign exchange rate front, Nishimuro said that the current strength in the yen would not give any immediate impact on its business as the company has hedged currency risks. But if the yen's strength last too long, then that would affect Toshiba, which has net exports of about $five billion a year. Toshiba is among many other Japanese manufacturer who assumed a dollar/yen rate of 120 yen in making business estimates for the business year that started in April. By late Friday in Tokyo, the dollar stood at about 116.55 yen. Toshiba in May unveiled a consolidated net loss of 13.9 billion yen in the last business year, plunging into the red for the first time in over two decades. For 1999/2000, it predicted group net profit to increase to 25 billion yen.