Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (40058)	11/28/2000 12:47:49 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

Korean chipmakers to cut 2001 investments SEOUL (Reuters) - South Korea's major chipmakers are planning to reduce plant investment in 2001 because of concerns over the growth of the chip market, analysts said on Monday. ``Korean manufacturers' DRAM (dynamic random access memory) output next year would likely be reduced by approximately 10 percent,'' Jay Kim, semiconductor analyst at ING Barings, said in a report issued on Monday. ``That would be a positive factor for the overall DRAM industry's demand/supply situation.'' Samsung Electronics, the world's largest computer memory chipmaker, said it might reduce its plant investment in 2001. ``We see a possibility of reducing our planned investment for next year,'' James Chung, a Samsung Electronics spokesman, told Reuters. ``We've become more conservative in dealing with a changing industry.'' He did not provide any figures. Samsung had said the amount of its 2001 investment would be similar to this year's level of about seven trillion won ($5.90 billion). ING Barings said Samsung Electronics was likely to reduce its original capital expenditures plan in 2001 by approximately 13 percent. Samsung shares closed up 11.18 percent at 189,000 won on Monday. The share price has fallen 28.9 percent so far this year, while the broader Korea Composite Stock Price Index has shed 46.11 percent in the same period. POSITIVE REACTION A spokesman for Hyundai Electronics Industries, another global DRAM chip manufacturer, said the company had recently reduced its 2001 investment plan to 1.5 trillion won from two trillion won in 2000. ``At the moment, we cannot say for sure the reduced investment would lead to a cut in chip output,'' he said. ``We don't see a need to expand facilities as we believe we can maintain our market position at current capex.'' Hyundai Electronics climbed by its daily limit high to finish at 8,330 won, but it is off 65.4 percent so far this year. Analysts said the chipmakers' move, aimed at stabilising recently beaten-down memory chip prices, drew a positive reaction from investors. ``The chipmakers would have no choice but to cut their investment plans given the risks over uncertain growth in the industry,'' said Jon Woo-jong, an analyst at SK Securities. The spot prices for the industry standard 64-megabit 8x8 PC 100 SDRAM chip stood at an intraday high of $4.29 as of November 22, off its 52-week high of $10.23, according to Ramdex, an Internet semiconductor price tracking site. The weak demand for DRAMs was caused by historically slow PC sales, which in turn stemmed from a slow transition to new Windows 2000 operating software from Microsoft. ``We in the past planned our investment on a yearly basis. But we've decided to make the term shorter and plan it on a quarterly basis,'' said the Samsung Electronics spokesman. CAUTIOUS APPROACH Jay Kim at ING Barings welcomed the DRAM makers' caution towards capex. ``Based on this type of management, we expect greater stability to emerge in the DRAM prices in the mid-to-long term timeframe unless demand continues to remain severely dampened,'' he said. ING Barings said last week that the first target for delay or possible cutback at Samsung Electronics was expected to be its 12-inch wafer plant and a new LCD (liquid crystal display) fab. ``If this is true, we think the impact on DRAM shipment volume for Samsung would be minimal in 2001 given our forecast that the 12-inch wafer facility would start pilot production with a few thousand wafers from the second half of 2001,'' it said. The securities firm said it expected Samsung to begin mass production of 12-inch wafers from 2002 and that the new LCD factory would be in production from the second quarter of 2002. ING Barings said its original capex estimate for Samsung was 7.2 trillion won in 2001 with the 12-inch wafer fab plant accounting for 1.2 trillion won and the new LCD fab at 900 billion won. ``We have no reason to hurry in putting the 12-inch wafer facility into operation, as its technology has yet to be tested,'' said Chung at Samsung Electronics.