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To: blake_paterson who wrote (56309)	10/2/2000 9:56:52 PM
From: blake_paterson	Respond to of 93625

IC Industry Cheers Sharply Increasing Orders from Japan October 2, 2000 (TAIPEI) -- Leading Japanese companies in the information industry will sharply increase their outsourcing orders by the end of the year. According to the report, Hitachi Ltd., Toshiba Corp., Mitsubishi Electric Corp. and NEC Corp. are expected to double their orders to their contract manufacturers, significantly benefiting Taiwan's IC manufacturers, including Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC), United Microelectronics Corp. (UMC), Winbond Electronics Corp. As a result, these companies will be working at full capacity until 2002. Leading Japanese chipmakers Hitachi and Toshiba recently announced that they would increase the proportion of their outsourcing orders with the aim of avoiding any risk caused by increasing capital investment. Taiwan's IC manufacturers welcomed the good news, which should result in the upgrading of their production through technology transfer from these chip-manufacturing leaders. Toshiba, Mitsubishi and Fujitsu will be the major sources for DRAM orders, benefiting particularly Winbond Electronics and Powerchip Semiconductor Corp. Texas Instruments Japan Ltd., NEC and Hitachi intend to place their contract manufacturing orders of LCD driver with TSMC, Analog Technology Inc. and Episil Semiconductor Inc. In addition, Macronix International Corp. is understood to have received Mitsubishi's orders for flash memory, while UMC and TSMC have won logic IC orders from Hitachi and NEC, respectively. The small profit margins of such contract manufacturing orders may not financially benefit the companies much, but the business keeps their production lines working without wasted capacity. Taiwan's IC manufacturers are trying hard to avoid the worsening prospects for their industry by trying to find more order sources. After the cancellation of an order for communication IC by Motorola Inc., TSMC made up for its lost production by successfully winning orders for logic IC and LCD drivers. TSMC revealed that in the short-term it would not be able to digest any more orders, as its third, fourth and fifth plants had no production capacity available. (Commercial Times, Taiwan)