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To: John Stewart who wrote (1997)	10/18/1999 12:11:00 PM
From: Ian@SI	Read Replies (2) \| Respond to of 3661

Another day, another fab announcement... ++++++++ October 18, 1999 NEC to Spend $760 Million On New Semiconductor Plant Dow Jones Newswires TOKYO -- Japan's NEC Corp. will construct a new semiconductor plant at its NEC Kyushu facility in southern Japan to produce advanced graphics large-scale integrated circuits, or LSI, and for high-speed dynamic random access memory chips, or DRAM, the leading electronic devices maker said. The new plant will be built to support an 300 billion yen ($2.85 billion) semiconductor order for Nintendo's "Dolphine" next-generation game machine as well as to support NEC's own plan to develop 0.13-micron embedded DRAM process technology. NEC Prospects Are Promising As It Locates Room to Grow (Oct. 15) Error! Objects cannot be created from editing field codes.NEC's Nishigaki Sees Recovery In Microprocessor Operations (Oct. 5) Nintendo Announces New System, Alliances With IBM, Matsushita (May 13) Construction of the new plant will begin in November, and operations are expected to begin from next August, NEC said. NEC will spend 80 billion yen on the new plant. The company expects returns equivalent to its capital outlay within the initial four to five years of the plant's operation, NEC managing director, Kanji Sugihara said. NEC will book 50 billion yen of the planned cost in the current fiscal year through March 2000, and the remaining 30 billion yen in the next fiscal year, NEC director Keiichi Shimakura said. The earlier announced 150 billion yen budget for capital spending this fiscal year covers the 50 billion yen investment in the new plant to be booked this year, Mr. Shimakura added. NEC will also spend 15 billion yen to build a new line at its existing LSI plant in Tsuruoka City in Japan's Yamagata Prefecture, which will adopt 0.13-micron embedded DRAM process technology. Through these moves, the company aims to expand its LSI production to 1 trillion yen in sales by the fiscal year to March, 2004 from an estimated 650 billion yen this fiscal year, NEC said. Nintendo will not invest in the Kyushu plant despite the plant's large focus on business with the game machine maker, as NEC plans to keep it open to other orders, Mr. Sugihara said. "How much of the plant's output will go to Nintendo depends on how successful its new game consoles are.. We will maintain a multi-production line at the new plant, which will shift its focus to other customers if Nintendo's new product sees weak results," he said. Chip production for game machines at NEC currently contributes less than 10% to the company's annual sales of semiconductors, and this percentage is expected to grow, especially with the latest contract with Nintendo, Mr. Sugihara added.