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

To: Proud_Infidel who wrote (46081)	5/2/2001 8:05:43 AM
From: Proud_Infidel	Respond to of 70976

Taiwan's TSMC Sees 50 Pct. Drop in Capacity Utilization May 2, 2001 (TAIPEI) -- Morris Chang, chairman of Taiwan Semiconductor Manufacturing Co., Ltd., told Forbes magazine in an interview that his company's capacity utilization, which at present is about 50 percent, will probably hit bottom in April or May, and gradually begin to pick up in the third quarter. This forecast is a downward revision from what he announced during a business briefing session early in February, when he said capacity usage is likely to hit bottom in March-April, then be about 70 percent in the second quarter and recover in the third quarter. It seems clear that the business environment surrounding the Si-foundry is far more severe than expected at the start of the year.<BR><BR>Circumstances also suggest that the average rate of operation could slide down from about 70 percent in the previous quarter to around 50 percent in the second quarter, indicating that the company's business performance will fall below the 58 percent level, the bottom of the previous business downturn in the third quarter of 1998.<BR><BR>Lying behind the business slowdown are drastic decreases in orders from integrated device manufacturers in Europe and the United States and fabless design firms, in addition to a decline in PC-related industries, which usually do relatively well in the second quarter, plus the fear of a slowdown in orders for chipsets.<BR><BR>TSMC's gross income on sales for the third quarter of 1998 was 37 percent, and the rate of operating profit, 25 percent. But this time, its capacity usage rate is lower, and a decline in the unit sales price also is anticipated. Moreover, in terms of operating costs, depreciation expenses and R&D outlays are not a small burden. Since the profits and losses of Worldwide Semiconductor Manufacturing Corp., whose break-even point is higher than that of TSMC, and TSMC-Acer Semiconductor Corp., which the company took over in 2000 and also must be added, both the gross profit rate to sales and the operating profit rate are very likely to fall below the third quarter of 1998.)