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To: blake_paterson who wrote (76034)	7/21/2001 1:45:46 PM
From: blake_paterson	Read Replies (1) \| Respond to of 93625

where is the bottom? Part 3: Fabs shut down to burn off inventory, cut costs Hynix will idle DRAM factory for six months to perform upgrade By Jeanne Graham EBN (07/20/01, 03:07:12 PM EST) ebnonline.com Since the beginning of June, at least six companies have announced shutdowns of semiconductor factories to ease inventory gluts and eroding prices. Last week, Korea's Hynix Semiconductor Inc. created an industrywide buzz by announcing it will idle a DRAM fab for an unprecedented six months as it comes to grips with market pressure that's not expected to let up any time soon. The company said it plans to use the downtime to invest about $150 million in upgrading the Eugene, Ore., facility from its current 64Mbit DRAM, 0.22-micron process technology to one that produces 256Mbit chips using 0.16-micron technology. “[DRAM] prices are very low right now,” said Farhad Tabrizi, Hynix's vice president of worldwide memory marketing. “Everybody is trying to take advantage of the slowdown and improve their capacity.”....Company executives and analysts said capacity reductions can rein in costs and improve prices by lowering supply. But in extended shutdowns, such as the one planned by Hynix, there is a risk of losing market share to competitors. “We're not too worried about market share,” Tabrizi said. “We're more concerned with profitability and return to our shareholders.” (LOL!!) Six months is an unusually long time for a plant closure, said Will Strauss, an analyst at Forward Concepts Co., Tempe, Ariz. “But this is an unusual market and the worst downturn we've ever seen,” he said. “The reality is Hynix may be sacrificing market share for long-term profits, but it may be necessary to keep investors happy.” Tabrizi said the other large DRAM suppliers will also have to decrease production to drive prices up. “If everybody shuts down for three to four weeks, it will bring supply and demand back in balance,” Tabrizi said. DRAM giants Micron Technology and Samsung Electronics have both said they have no plans to cut production.... BP