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Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: survivin who wrote (34)	7/6/2000 1:18:16 AM
From: Mani1	Read Replies (1) \| Respond to of 275872

This report is 2 days old :) eb-asia.com Boom times ahead Equipment delivery lead-times are being stretched to the limit THE back-end chip packaging business hasn't been this busy in a long time. The upturn in semiconductor demand has most IC assembly and test factories running to capacity. And back-end equipment vendors can't supply gear fast enough to satisfy capital expansion programs at the chip factories. "We believe this momentum can carry on until the early part of next year," says G.Y. Lee, general manager of ESEC (Asia Pacific), a Swiss-based die and wire bonder maker. The boom times have stretched equipment delivery lead-times to the limit. IC assembly houses have the demand "but they're not able to put the equipment in place as fast as they would like to," says Inderjit Singh, president of United Assembly and Test Center (UTAC), one of two main IC packaging subcontractors in Singapore. The chip packaging crowd in the region is benefiting from two strong trends. With the growth in wafer fabrication facilities in Singapore and Southeast Asia, the demand for back-end supporting services such as assembly and test is growing proportionately. On top of that, assembly and test operations are also benefiting from outsourcing, with more integrated device manufacturers (IDMs) choosing to use independent contractors to assemble and test their ICs. Typically, an IDM will seek to outsource 20% to 40% of its back-end requirements, up from around 5% to 10% a few years ago, says Singh. On the technology side, the transition from older style leaded devices to laminate type packages is fuelling growth in packaging equipment. Old machines may not be suitable for some of the newer packages, meaning more sales for the equipment vendors. The proliferation of package types also means it's more difficult for both vendors and their customers to pick the winning technologies. Bet on the wrong package type and it's an expensive mistake. "There are so many industry focus areas now, I don't know which one to believe," says Peter Tan, general manager of Speedline Technologies Asia. For his part, Tan thinks BGA and its variants will dominate over the next two years. Speedline, traditionally a supplier of machines for SMT assembly, is moving into the semiconductor packaging market. To support the growth in the assembly and test industry in Singapore and Southeast Asia, back-end equipment vendors are improving their presence locally. At the start of this year, US equipment company Kulicke & Soffa Industries opened a new manufacturing facility in Singapore. ESEC is boosting R&D investment in the region while reviewing whether to re-establish its manufacturing presence in Singapore, which was closed down in 1998 during the height of the downturn. Both K&S and ESEC compete with Hong Kong-based wire and die bonder maker ASM Pacific Technology Ltd, which has R&D and manufacturing operations in Singapore. Charles Vath, director of process and packaging technology for the Singapore operation, believes that American suppliers have been slow in coming to Asia. "If you're a back-end equipment manufacturer based in the US and you don't put your foot in Asia real soon, you won't be able to put your foot in Asia," says Vath. While Singapore's role as a packaging R&D and support infrastructure hub is secure, it may lose out in the contract testing area, according to Ian Jenkins, vice president of Asia operations for Multitest Electronic Systems (Asia), a supplier of test handlers. "General purpose test is still quite labor intensive so you'll probably see not much growth in test in Singapore," he says. Instead, he sees the Philippines and Thailand benefiting from the move to outsource IC testing. If some of the business goes elsewhere, that's not necessarily bad for Singapore. A new investment in one place doesn't necessarily mean a loss for another, according to UTAC's Singh. "I don't think that it's a zero sum game," he says. "Some will be focusing on high-end products, some on low. Southeast Asia has the opportunity to be the next Taiwan."

To: survivin who wrote (34)	7/6/2000 5:15:02 PM
From: EricRR	Respond to of 275872

My thoughts on flash and SSB: SSB said that they believe AMD will be hurt by lower flash prices. Other analysts say that flash will remain tight. I think the disagreement results from the mistake of lumping the flash market together as one whole- It's much more diverse than say the DRAM market. AMD is the leader in high density flash, an area with fewer competitors (Intel) and a higher likelyhood of new types of products (MP3 players, digital cameras, digital recorders, PDA's). The functional appetite of these devices for more flash is almost endless. Who wouldn't want a digital camera or a MP3 player with twice (quad, ect...) the standard memory? These products will continues to increase their flash content as price permits. This is a very important point. The low density flash market has more competitors, and for it to see higher growth there must be more end units sold (say more phones), as opposed to better (feature rich) phones (which of course would require the type of high density flash AMD is targeting!) AMD also is struggling to keep up with sales of flash memory chips, which are used in various hand-held devices, such as cell phones. "Demand for flash is strong, and we're working hard to squeeze out every unit out that we can," Ruiz said. Until it can handle current demand, AMD isn't taking on new customers for flash chips.