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To: Proud_Infidel who wrote (35705)	7/11/2000 10:05:29 AM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

DRAM shortage seen boosting Korea chipmaker shares SEOUL (Reuters) - South Korean semiconductor manufacturers are on course for record exports this year, spurred by demand for DRAM chips, and the prospects for higher earnings make chipmaker shares a good buy, analysts said on Monday. They said the two biggest dynamic random access memory chip makers -- Samsung Electronics and Hyundai Electronics Industries, which accounted for 40 percent of world DRAM chip sales in 1999 -- would see a sharp rise in earnings. Demand for DRAMs is up because of a steady increase in high-end PC users and the adoption of Microsoft's Windows 2000 operating system, which requires more DRAM chips per computer. But supply is running behind -- and prices thus rising -- because of the cost of expanding capacity, questions about the reliability of equipment, and uncertainty whether high demand will last long enough to justify expansion efforts. ``DRAM supply is a quite simple function of fab (silicon wafer fabrication capacity) addition and lithography technology,'' Woo Young-moo, a semiconductor analyst at Credit Lyonnais Securities (Asia) Ltd (CLSA), said in a recent report. ``Except for Samsung, no one in Korea is building new fabs at the moment.'' Hyundai Electronics had only vague plans for new fab construction in the second half of 2001. Woo said that due to the massive costs for 12-inch wafer fab capacity and the reliability of processing equipment for the new technology, most DRAM makers in Korea and elsewhere were still taking a wait-and-see attitude on new fab construction. ``This will continue to act as a big capacity constraint for the DRAM market over the next two years,'' said Woo at CLSA. KOREA SEES MORE EXPORTS AS DEMAND SURGES Meanwhile, in value terms Korea's semiconductor exports are expected to reach a record $25 billion in 2000, up 23.2 percent from a year ago, according to an industry association. ``Korea's chip exports are expected to post a record $25 billion this year helped by surging demand for DRAM chips and a following rise in their prices,'' the Korea Semiconductor Industry Association (KSIA) said. The export forecast by the association was close to the Commerce Ministry's recent projection at $24.5 billion for the year, which it revised from an earlier forecast of $23.5 billion. The industry group said spot prices for benchmark 64-megabit DRAM chips were expected to hover at $9-11 towards the end of 2000 from $8-9 in the first half. Chung Jae-yeol, an analyst at Good Morning Securities, said an increase of $1 in the price of a 64M DRAM chip would result in growth of more than $700 million each in annual revenues for Samsung Electronics and Hyundai Electronics. ``The chip market is expected to expand at least until the latter part of 2002,'' Chung said. CHIPMAKERS UNDERVALUED Analysts said spot prices for 64M DRAM chips would average $8.4 in 2000, down from $9.2 in 1999, but deeper cuts in production costs would help boost major chipmakers' earning prospects. ``The forecast for this year is very optimistic as 64M DRAM prices usually fall by 20-30 percent annually,'' said Jon Chong-hwa, an analyst at Salomon Smith Barney. ``As a result, chipmakers are expected to see a record profit this year.'' Calculated in terms of 64 megabit chips, Samsung ships an estimated 710 million units per annum, while Hyundai produces 780 million chips. Samsung ended trade on Monday at 380,000 won ($339.4), up 38.35 percent for the year to date, in contrast to the 18.12 percent decline in the benchmark KOSPI index over the same period. Jon at Salomon Smith Barney said Samsung Electronics was undervalued against its global rival Micron Technology, whose share price rose 130.23 percent in the same period. Samsung's shares were nine times its 2000 earnings per share (EPS) against Micron's 42 times its 2000 EPS forecast. Hyundai Electronics closed at 24,150 won on Monday, up 1.66 percent for the year to date. Its shares were 10 times its 2000 EPS forecast.

To: Proud_Infidel who wrote (35705)	7/11/2000 10:07:09 AM
From: Proud_Infidel	Respond to of 70976

DRAM shortage seen boosting Korea chipmaker shares SEOUL (Reuters) - South Korean semiconductor manufacturers are on course for record exports this year, spurred by demand for DRAM chips, and the prospects for higher earnings make chipmaker shares a good buy, analysts said on Monday. They said the two biggest dynamic random access memory chip makers -- Samsung Electronics and Hyundai Electronics Industries, which accounted for 40 percent of world DRAM chip sales in 1999 -- would see a sharp rise in earnings. Demand for DRAMs is up because of a steady increase in high-end PC users and the adoption of Microsoft's Windows 2000 operating system, which requires more DRAM chips per computer. But supply is running behind -- and prices thus rising -- because of the cost of expanding capacity, questions about the reliability of equipment, and uncertainty whether high demand will last long enough to justify expansion efforts. ``DRAM supply is a quite simple function of fab (silicon wafer fabrication capacity) addition and lithography technology,'' Woo Young-moo, a semiconductor analyst at Credit Lyonnais Securities (Asia) Ltd (CLSA), said in a recent report. ``Except for Samsung, no one in Korea is building new fabs at the moment.'' Hyundai Electronics had only vague plans for new fab construction in the second half of 2001. Woo said that due to the massive costs for 12-inch wafer fab capacity and the reliability of processing equipment for the new technology, most DRAM makers in Korea and elsewhere were still taking a wait-and-see attitude on new fab construction. ``This will continue to act as a big capacity constraint for the DRAM market over the next two years,'' said Woo at CLSA. KOREA SEES MORE EXPORTS AS DEMAND SURGES Meanwhile, in value terms Korea's semiconductor exports are expected to reach a record $25 billion in 2000, up 23.2 percent from a year ago, according to an industry association. ``Korea's chip exports are expected to post a record $25 billion this year helped by surging demand for DRAM chips and a following rise in their prices,'' the Korea Semiconductor Industry Association (KSIA) said. The export forecast by the association was close to the Commerce Ministry's recent projection at $24.5 billion for the year, which it revised from an earlier forecast of $23.5 billion. The industry group said spot prices for benchmark 64-megabit DRAM chips were expected to hover at $9-11 towards the end of 2000 from $8-9 in the first half. Chung Jae-yeol, an analyst at Good Morning Securities, said an increase of $1 in the price of a 64M DRAM chip would result in growth of more than $700 million each in annual revenues for Samsung Electronics and Hyundai Electronics. ``The chip market is expected to expand at least until the latter part of 2002,'' Chung said. CHIPMAKERS UNDERVALUED Analysts said spot prices for 64M DRAM chips would average $8.4 in 2000, down from $9.2 in 1999, but deeper cuts in production costs would help boost major chipmakers' earning prospects. ``The forecast for this year is very optimistic as 64M DRAM prices usually fall by 20-30 percent annually,'' said Jon Chong-hwa, an analyst at Salomon Smith Barney. ``As a result, chipmakers are expected to see a record profit this year.'' Calculated in terms of 64 megabit chips, Samsung ships an estimated 710 million units per annum, while Hyundai produces 780 million chips. Samsung ended trade on Monday at 380,000 won ($339.4), up 38.35 percent for the year to date, in contrast to the 18.12 percent decline in the benchmark KOSPI index over the same period. Jon at Salomon Smith Barney said Samsung Electronics was undervalued against its global rival Micron Technology, whose share price rose 130.23 percent in the same period. Samsung's shares were nine times its 2000 earnings per share (EPS) against Micron's 42 times its 2000 EPS forecast. Hyundai Electronics closed at 24,150 won on Monday, up 1.66 percent for the year to date. Its shares were 10 times its 2000 EPS forecast.