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

To: Proud_Infidel who wrote (41033)	12/21/2000 3:39:45 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

Boom times may be over for silicon foundry industry By Mark LaPedus Semiconductor Business News (12/20/00 21:34 p.m. EST) SINGAPORE -- After experiencing a period of wild growth and demand, major silicon foundry vendors are now facing a major slowdown that could possibly last until 2002. In fact, silicon foundry vendors are now involved in a massive--and vicious--chain reaction. A downturn in the PC, communications, and consumer markets is causing a slowdown among chip makers--most of which have recently lowered their sales and profits forecasts for the fourth quarter of 2000. This, in turn, is having a ripple effect on the silicon foundry players, especially the "Big 3" in Asia: Singapore's Chartered Semiconductor Manufacturing Co. Ltd., Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), and Taiwan's United Microelectronics Corp. And in fact, the "Big 3'' foundry vendors have separately announced or hinted that the boom times may be over in the business. Last week, for example, Hsinchu-based UMC warned that its sales in the first quarter of 2001 would be 10% to 15% less than the previous period. Reports surfaced earlier this week that Hsinchu-based TSMC plans to cut its chip production, due to lower-than-expected demand in the worldwide IC industry. And analysts in Taiwan have cut their earnings per share forecast for TSMC in both 2000 and 2001. And today, Chartered predicted that its sales in the fourth quarter would be in the "mid-single digits," but it will lower its revenue and profit targets for the entire year of 2001. The announcements represent a major turn of events in the silicon foundry business. Over the last year or two, the pure-play foundries have experienced staggering growth in terms of profits and sales, due in part to a major boom in the worldwide IC industry. Until recently, silicon foundry suppliers were also turning away customers by the droves--and for good reason: these vendors did not have the capacity to meet huge OEM demand. And as of late last year, in fact, executives from TSMC, UMC, and others claimed they were "sold out" of capacity at least until 2002. Now, it's a different story. While capacity remains tight for some process technologies right now, the overall availability for wafers is beginning to loosen up. And 2001 looks cloudy for some. For example, Chartered today said that its earnings for the fourth quarter would be $0.50 to $0.52 a share, which falls in line with analysts' estimates. The company expects that its sequential revenue growth in the fourth quarter will be in the "mid-single digits." In the third quarter of this year, it reported sales of $305.6 million on earnings of $0.51. But given the turbulence in the market, Chartered said that sequential revenue growth is likely to be down, instead of up 5% as previously expected, in the first quarter 2001. And if the recent market trends continue, the company said it would need to lower its revenue and profit forecasts for 2001. Barry Waite, president and chief executive of Chartered, remained upbeat in spite of the announcement. "While it appears that near term demand in many of the company's end markets is being adversely impacted by inventory corrections, we believe that the long term outlook for the foundry services market has never been brighter due primarily to the compelling economics of outsourcing and the high growth rate of fabless semiconductor companies," he said. The company plans to issue its fourth quarter and year 2000 earnings release on Jan. 30, 2001.