Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : C-Cube -- Ignore unavailable to you. Want to Upgrade?

To: Stoctrash who wrote (43464)	7/30/1999 5:39:00 PM
From: DiViT	Read Replies (2) \| Respond to of 50808

Taiwan Semi promises ramped-up production (Cube's foundry) By Reuters Special to CNET News.com July 30, 1999, 11:00 a.m. PT news.com Taiwan Semiconductor Manufacturing, the world leader in made-to-order microchips, admitted being caught flat-footed by a rebound in demand this year and said 1999 production could surge to 1.9 million wafers. But the company's order books will really begin to bulge in 2000, company president F.C. Tseng told Reuters. "I just cannot believe how strong our first-half data has been. Our forecasts before February this year were pessimistic but since then we have seen increases every week," Tseng said. "But I think the real demand will come in the year 2000," he said in an interview late Thursday at company headquarters in the Hsinchu Science Park, Taiwan's Silicon Valley. The microchip giant, Taiwan's leading blue-chip firm, Tuesday reported first-half pretax profit of T$10.026 billion (U.S. $311 million), up 6.5 percent on a year earlier. The increase came despite a solid first-half performance in 1998 and a downturn in the world chip market that took hold in the second half of last year. The company's shares have soared along with the new demand, closing Thursday at T$110.50 (US $3.43), up 91 percent on the 1998 close. According to Reuters Securities 3000, that puts the company's price-to-earnings ratio at a hefty 45. History has shown it is difficult to make accurate predictions in the volatile sector, Tseng said, declining to forecast profit for this year and next or to comment on whether the company would be able to live up to its P/E ratio. But he said Taiwan Semiconductor's outlook remained "very strong,'' predicting 1999 production of 1.9 million wafers, up sharply from 1.2 million last year. "Our capacity is almost fully utilized so our profitability should be very, very good," he said. Capacity utilization has been a matter of utmost importance to Taiwan Semicon this year as it tries to keep its head above the rising tide of orders. It made waves in the industry in June when it took a controlling stake in ailing Acer Semiconductor Manufacturing, the memory-chip unit of Taiwan computer leader Acer, in a bid to boost capacity. It plans to convert Acer Semiconductor from a producer of dynamic random access memory (DRAM) chips to a maker of Taiwan Semicon's bread-and-butter "foundry'' chips, the more specialized and technology-intensive production of made-to-order logic chips on behalf for other companies. Tseng said Taiwan Semicon so far has not had to turn away any business and that further such acquisitions were unlikely. But he added that current capacity was still considered inadequate for expected demand in 2000 and that the firm was now focusing on getting the most out of existing in-house facilities. Processing equipment would be moved into the company's new sixth plant in October instead of an original January 2000 target. Output at its fifth plant, moreover, would be raised from an expected 28,500 wafers per month to 35,000 next year.