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

To: Proud_Infidel who wrote (50706)	8/16/2001 2:35:51 PM
From: Proud_Infidel	Respond to of 70976

TSMC, UMC may face pressure from upstart chip firms BLOOMBERG TAIPEI TSMC (Taiwan Semiconductor Manufacturing Co, ¥x¿n¹q) and other contract chipmakers may face price pressure from new rivals, market researcher IC Insights Inc said. TSMC and its next largest rival, United Microelectronics Corp (UMC, Áp¹q), earned gross margins of as much as 50 percent in their most profitable years. Those margins will fall as Dongbu Group of Korea, First Silicon (Malaysia) Sdn and Silterra (Malaysia) Sdn start operations this year and Hynix Semiconductor Inc shifts to making chips for other companies as its main memory-chip business remains unprofitable. "First Silicon and Silterra will put tremendous pricing pressure on the market," Bill McClean, the president of IC Insights, said in an interview. "Gross margins will slide down to the 40 percent range." Contract chipmakers will account for about 28 percent of total worldwide chip sales by 2004, doubling from 14 percent this year, McClean said. Global chip sales this year will reach US$139.2 billion, according to the research company's estimates. TSMC said in a conference call with analysts on July 26 pricing pressure increased in areas that use its older technology to make silicon wafers. "We are facing some difficulty at the 0.35-micron level," said Rick Tsai (½²¤O¦æ), TSMC president. "We are developing a new business model." Tsai declined to elaborate on how TSMC plans to adapt. TSMC's most-advanced production technology is a 0.13-micron process. Finer technologies help chipmakers cut costs and make semiconductors that consume less energy and are more powerful. The three-largest companies in the business, TSMC, UMC, and Chartered Semiconductor Manufacturing Ltd (¯S³\¥b¾ÉÅé) of Singapore, will account for about three-quarters of contract chip production by 2005, slipping from their anticipated 84 percent share this year, though Chartered will probably quickly fade to fourth or fifth place McClean said. taipeitimes.com