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

To: Stoctrash who wrote (48406)	1/21/2000 10:13:00 AM
From: BillyG	Respond to of 50808

All of STM's chip families are on allocation -- I assume that this includes MPEG-2 decoders and settop chips. This is good for CUBE! eetimes.com Capacity crunch leads STMicro to broad allocation By Peter Clarke EE Times (01/20/00, 6:31 p.m. EST) PARIS — STMicroelectronics reported improved results for the 1999 calendar year on Thursday (Jan. 20), but said it has begun allocating orders within all of its product families. Under allocation, STMicro customers could be rationed and may not be able to buy extra chips to respond to increased demand for their products. Allocation is suddenly so widespread at STMicro that analysts see it is a sign that a capacity crunch is about to hit the semiconductor market, earlier and more widespread than previously predicted. While announcing the company's annual results here, Pasquale Pistorio, STMicro's veteran president and chief executive officer, said the current situation is "the most explosive demand I've ever seen in my career." The company's flash memory supplies are seriously constrained. Despite plans to bring on additional capacity at several fabrication facilities, company executives said that ST's flash memory production is sold out for the whole of 2000. When asked if any of ST's products were on allocation, Pistorio responded, "The question should be 'Do you have any product families not on allocation?' And the answer would be 'No.' "We try to allocate [production capacity] first to our strategic partners and then to our top 30 customers," he said. For the year ended Dec. 31, STMicro reported annual revenues of $5.06 billion, up 19 percent from the previous year, and net income of $547.3 million, up 33.1 percent from 1998. The financial results showed that ST's situation improved quarter by quarter through 1999, ending in a booming fourth quarter in which revenues were up 30.5 percent to $1.48 billion, compared with the year-earlier fourth quarter, and net income was up 51.3 percent to $184.3 million over the same period. Pistorio said that he believed ST was in a better position than many of its competitors because it had laid plans in 1999 for new fabs and to expand production at a number of existing fabs. New 8-inch fabs in Rousset, France and Agrate, Italy, and a 6-inch fab in Singapore, are all due to begin volume production in 2000. But Pistorio admitted that limitations in the supply of production equipment had forced ST to miss a target for capital expenditure in 1999. "We said we would spend $1.6 billion, but we missed. We spent $1.348 billion but we have a lot of equipment arriving at factories now," he said. Capital expenditure at ST is likely to increase again in 2000, but much of the new capacity will only begin to come on-stream in the second half of this year. Citing preliminary results released earlier this year by Dataquest Inc., which showed worldwide semiconductor revenues growing 17.8 percent in 1999, Pistorio said, "The market without DRAM grew 16 percent last year and we grew 19 percent. We believe ST is positioned to grow more than the market in 2000."