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 (45553)	4/18/2001 4:44:41 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

Foundry rate expected to drop to 50% By Faith Hung EBN (04/18/01 11:59 a.m. EST) HSINCHU, Taiwan --Taiwan Semiconductor Manufacturing Co., the world's biggest pure-play foundry, expects weak demand worldwide to push its utilization rate to the lowest level ever. TSMC chairman Morris Chang said that the utilization rate of his company's fabs will fall “very close to 50%,“ or even slightly lower, in the next few months. That represents a sequential drop from 70% in the March quarter and 100% in the fourth quarter of last year. Chang's remarks, though, may indicate the semiconductor industry isn't far away from the bottom. “I think the bottom will be reached in the April-May time frame,” he said during a recent interview. “The recovery may not be a very swift and brisk one. But I do think that the third quarter will be better than the second.” The chairman added next year would improve from this year. The guidance by Chang is likely to send a relief to an industry that has been through plenty of bad news since 2000. Examples: Chip giant Intel Corp. said yesterday its first-quarter net income slumped 82 percent from a year earlier. Altera Corp., a fabless design house and among TSMC's top clients, has said that a stockpile of inventories would keep Altera from booking any capacity at the foundry before September. “There has been so much pessimism all over the IT market. Now, it seems we've finally spotted this cycle's bottom,” said Chris Hsieh, a senior semiconductor analyst at ING Barings Securities in Taipei. Agreed Rick Hsu, a Nomura Securities analyst. Hsu forecast that about 52% of TSMC's production lines would be used in the second quarter, climbing to 58% in the third. A rise to 76% would be seen in the December quarter, he contends. PC and consumer electronics products are expected to be the first to pick up, analysts said. Seasonal demand, among others, would drive up demand as soon as August and October, respectively. As for communications, its inventory correction would take quarters to complete, they said. For the first quarter, TSMC and its closest rival -- United Microelectronics Corp. -- will post sequential slides in their earnings by almost 50%, analyst said. TSMC's earnings are forecast to drop to 2.6 cents per share from 5.6 cents during the period, while UMC's shrinks to 2.3 cents from 4.4 cents, Hsu said. Both companies are scheduled to report their earnings at end of this month. Sequentially, TSMC has reported a 26.6 percent sales drop in the first quarter to $1.2 billion, and UMC a 26.0 percent decline to $715.2 million.