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To: Ram Seetharaman who wrote (5984)	9/17/1999 12:51:00 AM
From: DJBEINO	Respond to of 9582

With prices for 16 megabit DRAMs at a new high, and wafer foundries operating at full capacity again, chip makers in Taiwan and the Asia Pacific region are enjoying strong profits and subsequently are increasing their capital expenditures, according to semiconductor equipment industry leaders meeting in Taiwan this week. ''We (the industry) should have a pretty good next few years,'' according to David Wang, senior vice president of Applied Materials Inc., speaking at SEMICON Taiwan 99 -- the annual exposition where chip makers and equipment and materials vendors gathered to do business and exchange ideas and information. According to reports presented at the conference, a strengthening PC market for the second half of 1999 augurs well for the semiconductor recovery: -- PC unit growth of 14% or more is expected for this year. -- In the communications market, revenue for equipment producers is up 25% in Q2 with a positive outlook for the rest of the year. To prepare for the burgeoning demand for chips, Taiwan chip-makers have revised their capital spending budgets. TSMC raised its 1999 level by almost 12% to $1.25 billion and plans to spend $1.55 billion next year. The UMC group has budgeted $1.48 billion for capital spending this year, up from just over $1 billion in 1998. This year the Taiwan market for semiconductor equipment and materials will be $4.2 billion, up 27% from 1998. Spending next year is expected to grow 24% to $5.2 billion, according to Semiconductor Equipment and Materials International (SEMI) estimates. ''Due to Taiwan's accelerated pace of technology development, it now accounts for about one-sixth of the world's entire expenditure on semiconductor equipment,'' said Stanley T. Myers, president of SEMI. By 2000, Taiwan will be close to 20% of the world market, according to Myers. Over the next 10 years, chip making, design, packaging and testing companies in Taiwan are expected to spend $60 billion, according to the Taiwan Semiconductor Industry Association (TSIA). ''Clearly in the last year or so Taiwan companies have really accelerated their technology to the level where they are at par, or in many cases in advance of US manufacturers,'' observed Gale Lane, vice president of marketing for Boxer Cross Inc., a SEMICON Taiwan participant. At this week's event, many signs emerged that the DRAM recovery was well underway. ''Now with the tremendous increase in the DRAM price I expect we'll see a lot of capital equipment expenditures here (in Taiwan) in the next six months,'' said John Heaton, president and CEO of Nanometrics Inc. Semiconductor equipment and materials suppliers are expecting a surge in orders from DRAM makers as the demand vs. capacity situation becomes more balanced. From a peak of 30% overcapacity in 1996, the market overcapacity will drop to an annual average of 8% in 1999 and is expected to reach a balance next year, according to Applied Materials. SOURCE: SEMI biz.yahoo.com