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To: Tony Viola who wrote (113056)	10/10/2000 3:15:35 PM
From: ColtonGang	Respond to of 186894

Somebody's banking on chips.......IBM to invest $5B in chips Tech titan says capital outlay is largest expansion in company's history October 10, 2000: 12:27 p.m. ET NEW YORK (CNNfn) - IBM said Tuesday it will spend $5 billion to expand its semiconductor manufacturing capacity, a move executives said will be the largest capital investment in Big Blue's history. Half of that will be used to build a new plant in East Fishkill, N.Y. The remainder will be used to expand chip-making capacity in IBM's existing Burlington, Vt., and Yasu, Japan, facilities, as well as in Altis Semiconductor, a joint venture with Infineon located in Corbeil-Essonnes, France. IBM's capacity expansion plans come as concerns are mounting that the semiconductor industry is on the verge of a downturn. The semiconductor industry historically has been characterized by boom-and-bust cycles with up periods of undersupply followed by down periods of oversupply. Though most analysts agree that the current semiconductor cycle will not begin to turn down until 2002, there have been growing concerns that it may begin its downswing before that. Lou Gerstner, IBM's chairman and CEO, is expected to reveal further details at a press conference in New York City Tuesday afternoon. Shares of IBM (IBM: Research, Estimates) declined in early afternoon Nasdaq trade Tuesday, falling $3.44 to $114.50, a 2.9 percent decline.

To: Tony Viola who wrote (113056)	10/10/2000 3:57:31 PM
From: Amy J	Read Replies (4) \| Respond to of 186894

Hi Tony, RE: "Carrying it further, makes it sound like maybe Intel's aggressive 6 billion dollar fab/assembly expansion plans might not all be needed. " Elmer and Paul are much better at figuring this stuff out than me, but making estimated calculations from the flash market report posted the other day, that could be about 3 new fabs just for flash, right? IBM and Intel seem to be acting like the worst thing that could happen is not having enough capacity to build future products. They make their plans according to what they project is needed in the future, not necessarily today's market psyche. So, does this mean current demand may have dipped, but they expect future demand to be strong? Regards, Amy J