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Technology Stocks : Amkor Technology Inc (AMKR) -- Ignore unavailable to you. Want to Upgrade?

To: md1derful who wrote (677)	5/15/2000 4:32:00 PM
From: tech101	Read Replies (2) \| Respond to of 1056

Article with AMKR: Chip Demand Leads... by: amkr_investor 5/15/00 3:51 pm Msg: 13502 of 13504 Article with AMKR: Chip Demand Leads... Chip Demand Leads to More Supply Deals Financial Times, May 12, 2000, 387 words Global chip shortages are causing increasing concern among leading computer and electronics companies - but where some see business challenges, others see golden opportunities. Worldwide chip sales reached an all-time record high in March, according to the latest report from the Semiconductor Industry Association, the US industry trade group. Chipmakers sold almost Dollars 15bn in components, about 34 per cent more than the Dollars 11.2bn they sold in the same period a year ago. But behind these rosy figures lies a chip shortage that is causing computer and electronics giants to scramble and lock in long-term supplies. Without even the simplest component, production lines can quickly grind to a halt. "We had a situation recently where we couldn't source capacitors," said Carly Fiorina, chief executive of Hewlett-Packard. "That could have meant the loss of hundreds of millions of dollars in computer equipment sales. Fortunately we managed to locate a supplier." Solectron, the world's largest electronics manufacturing services group, has also been affected. "We could be growing at a much faster rate if it were not for component shortages," said Ko Nishimura, chairman and chief executive of Solectron. The company warned on April 28 that its fiscal third-quarter results would be lower than analysts' estimates, partly due to component shortages. On Tuesday Cisco Systems, the world's largest data communications equipment group, expressed concern about chip shortages. "We have very good relations with chip suppliers but as we acquire companies, we are dealing with unfamiliar new suppliers," said John Chambers, chief executive. He added that the large number of start-up companies, especially in growth sectors such as optical networks, was adding to the competition for limited component supplies. For the industry giants, one approach is to lock in long-term supply deals. In March, Cisco signed a three-year supply deal with Advanced Micro Devices for flash memory chips, one of the scarcest of chips and vital in the production of a huge range of products. In February, Ericsson signed a deal with Intel to purchase more than Dollars 1bn of flash memory chips over the coming three years. For others, the chip shortage represents a wonderful business opportunity. Amkor Technology, the world's largest chip packaging group, is planning to launch a global chip foundry giant. Chip foundries are large chipmakers for hire, producing components for others. Through its stake in Anam Semiconductor, the Korea-based foundry, and its extensive contacts with electronics companies such as Texas Instruments and Motorola, the US-based company is rounding up equity investments to launch the venture. "This is a great opportunity for us to profit from the global chip shortage," said John Boruch, Amkor president. "In times like these, chip foundries are an extremely profitable business."