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To: DJBEINO who wrote (9120)	1/17/2001 2:40:10 AM
From: DJBEINO	Read Replies (2) \| Respond to of 9582

Mosel Delays Plan to Build Overseas Plant in Memory Chip Slump By George Hsu Taipei, Jan. 17 (Bloomberg) -- Mosel Vitelic Inc., Taiwan's No. 3 memory chipmaker by value, said it will delay plans to build a $2.5 billion chip factory in Canada as memory chip prices fall below the cost of production for some manufacturers. ``We don't think now is the proper time for overseas expansion,'' said Della Wu, Mosel's deputy manager of public relations. The delay marks a setback in Mosel's planned investment in Canada to diversify away from commodity memory chips and into more profitable custom-designed semiconductors used in mobile phones and other portable electronic equipment, analysts said. ``It's a good decision to halt expansion at a time when the industry is slowing, but that will also hurt Mosel's plan to expand beyond memory chips,'' said Connor Liu, an analyst with SG Securities in Taipei who downgraded Mosel's stock to ``hold'' from ``buy.'' Mosel shares fell NT$0.8, or 3 percent, to NT$24.2 at the close of trading on the Taiwan Stock Exchange. Share prices of Taiwanese memory chip rivals including ProMos Technologies Inc., Nanya Technology Co. and Powerchip Semiconductor rose. Hyundai Talks Separately, Mosel said that while it has been in talks with debt-burdened Hyundai Electronics Industries Co. about the possible buyout of the No. 2 memory chipmaker's overseas chip plants, the Taiwanese company is uninterested in an acquisition this year. ``We have an ongoing relationship with Hyundai Electronics and have talked about the idea of buying its overseas plants,'' but will not invest abroad in any chip factories this year, said Wu. Hyundai, the world's No. 2 memory chipmaker, said today it will sell assets to help repay 60 percent of its 7.8 trillion won ($6 billion) of debt maturing this year to qualify for a state-led bond refinancing program. Memory chipmakers Hyundai and Mosel are probably losing money as prices for their products fall below the production cost. ``It will be pointless to buy the Hyundai plants a year from now,'' said Liu. A 64-megabit dynamic random-access memory chip costs Mosel about $3.2 to make. The current spot market price per chip is close to $2.88, according to the American Integrated Circuit Exchange. Taiwan's political uncertainty and slowing economy are also weighing on Mosel's expansion plans. ``Banks will be reluctant to participate in our expansion plans because of political infighting and the worrisome economy,'' Wu said. A string of political clashes in Taiwan since President Chen Shui-bian took office last May undermined investor confidence in Taiwan, where the key stock index lost 44 percent of its value last year.