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.

Technology Stocks : Alliance Semiconductor -- Ignore unavailable to you. Want to Upgrade?

To: DJBEINO who wrote (9334)	5/22/2001 12:48:27 AM
From: DJBEINO	Respond to of 9582

UMC itches to be leader SHIFTING GEARS: The semiconductor foundry business -- making chips to the design specifications of customers -- has been dominated worldwide by TSMC for years. UMC intends to change that By Dan Nystedt STAFF REPORTER United Microelectronics Corp (UMC, Áp¹q) is tired of playing second fiddle to Taiwan Semi-conductor Manufacturing Co (TSMC, ¥x¿n¹q) in the semiconductor foundry business, and three moves the company has made this year are putting it on a path to the top. Those moves include spinning off chip design subsidiaries, scaling back employee bonuses due to poor stock market conditions and giving transparent estimates of its performance. People are beginning to notice the changes. In a bid to become a pure foundry, UMC started the year by announcing plans to spin off all of its own design houses. Semiconductor foundries like TSMC and UMC need to win the confidence of customers in order to succeed, and since foundries handle customer designs on leading technology microchips, they have to prove the ability to protect their customers' intellectual property rights. Outright ownership of a potentially competing design firm does not help. Therefore the company began divesting its chip design subsidiaries this year, listing Novatech Microelectronics Corp (Ápµú¬ì§Þ) on the Taiwan Stock Exchange early in April, and implementing plans to spin off another design subsidiary, MediaTek Inc (Ápµo¬ì§Þ), in the third quarter. This is a long road for the company, since UMC purportedly still owns a handful of design subsidiaries and still holds 27.8 percent of Novatech's stock. "We couldn't just dump everything all at once," said one UMC official, "it takes time." The long-term plan, though, is to continue divesting. The company is also taking shareholder concerns more to heart. To please shareholders, UMC plans to pay employees a much smaller stock dividend than TSMC this year and has been very transparent in its estimations of the semiconductor industry this year. After its board of directors meeting last March, UMC said it would pay a 15 percent stock dividend, with a 1.1 percent stock bonus valued at NT$6.7 billion for employees. By comparison, TSMC approved a 40 percent stock dividend last week and plans to pay out a 2.8 percent employee stock bonus valued at NT$29.4 billion. The amount paid to employees is calculated by using profits in the year 2000, but no cash actually changes hands, only shares of stock. Bad market conditions is precisely the reason cited by UMC for its decision to lower employee bonuses this year. The company stated, "It is against corporate ethics to heavily dilute earnings per share with employee stock bonuses, especially when EPS is on the decline," in a statement released after its March board meeting. In the same meeting, UMC reduced compensation for all board directors and supervisors from 1 percent to 0.1 percent of earnings. The company also did not shrink from being transparent in statements about the semiconductor industry this year. Company chairman John Hsuan («Å©ú´¼) said earlier this year UMC would likely suffer an operating loss in the second quarter due to the downturn. TSMC insists they can keep above water, but analysts say in both cases it's too close to call. Hsuan followed up the statement by telling the local media last week that he believed the current semiconductor industry downturn may not see signs of recovery until the beginning of next year. Again, the UMC chairman offered a bleaker picture than TSMC's counterpart Morris Chang (±i©¾¿Ñ), who has said many times he expects April-May to be the bottom and the "third quarter will be better than the second and the fourth quarter will be better than the third." Many analysts applaud Hsuan's straight talk in a year when visibility in the industry is so dim. It's probably better to lean toward the conservative side in predicting company performance, they say. taipeitimes.com

To: DJBEINO who wrote (9334)	5/22/2001 1:49:41 AM
From: DJBEINO	Read Replies (2) \| Respond to of 9582

UMC (2303) closed @52.50 +1.50 vol 44,607,807 most active +++++++++ May 21 net purchase 11,759,000 shares ++++++++ TAIWAN WEIGHTED closed @ 4991.48 +32.87 (+0.66%) Day's Range :4973.06 - 5049.04 +++++++++++ Tokyo, May 22 (Bloomberg) -- Japanese stocks rose for a second day, led by semiconductor-related companies on a report Hitachi Ltd. will close plants and halve production of chips used in mobile phones to cut costs and restore profit growth. ++++++++++++= UMC said that it is not changing its expectations for the second quarter. ``We are standing by our comments at our last investors conference,'' said Jim Ballingall, a UMC vice president in the U.S.