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

To: Dale Knipschield who wrote (50860)	8/20/2001 7:45:58 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

Taiwan's Mosel-Vitelic Reports Substantial Loss in First Half August 20, 2001 (TAIPEI) -- Mosel-Vitelic Corp., one of Taiwan's leading DRAM makers, announced a first-half loss of NT$7 billion (US$205.8 million at US$1 = NT$34), the worst loss of its kind in Taiwan's DRAM industry in the first half. The loss includes a deficit of NT$4.7 billion (US$138.23 million) in its core DRAM operation. The company lost NT$2 per share in the first half due to weak DRAM demand. Sharp Corp. of Japan, one of the Taiwanese chipmaker's major customers, reduced orders in the first half to lower inventory backlogs. Mosel-Vitelic's loss rose 10 percent in the second quarter and is expected to surge 20 percent in the third quarter. However, the firm expects its fourth-quarter operations to turn a profit and the DRAM market to begin bottoming out in the third quarter. Most of Taiwan's listed DRAM makers lost between NT$1 billion (US$29.4 million) and NT$7 billion in the first half. Local market specialists said that spot prices for DRAMs have hit bottom and are expected to rebound in the current quarter due to growing demand. To cope with the future demand, many of Taiwan motherboard makers have begun piling up inventories. However, the motherboard manufacturers will suffer losses if the prices fail to pick up by the end of September. A DRAM manufacturer said that the prices for 128Mb DRAM chips in the current quarter are lower than in the second quarter, which hurts the profits of manufacturers. The profitable niche products that Mosel-Vitelic's only six-inch silicon-wafer fabrication plant, or fab, is producing include embedded flash memory chips. Its capacity utilization ratio has dropped to about 20 percent to 30 percent, with monthly output diving to 6,000 wafers from 30,000 wafers. The factory reported a first-half loss of NT$1.2 billion to NT$1.8 billion (US$35.29 million to US$52.94 million) and a loss of NT$500 million to NT$600 million (US$14.7 million to US$17.6 million) in July alone. Mosel-Vitelic executives said that the DRAMs made at the 12-inch fab operated by ProMos Technologies Inc. and Infineon Technologies AG of Germany are channeled to their company and Infineon. This further hurts the company's backlog problem. Higher charges for packaging and testing services by ChipMos Technologies Inc. are other major factors behind Mosel-Vitlic's first-half loss. ProMos and ChipMos are Mosel-Vitlic's subsidiaries. Although DRAM prices are in the doldrums, Mosel-Vitelic, ProMos and other local major DRAM makers remained active in arranging funds for the establishment of their 12-inch wafer foundries in preparation for the industry's recovery. They believe that their leadership in the 12-inch foundry process technique will ensure healthy market shares and profits when the industry gets back on track. The fundraising moves by local DRAM leading companies are expected to peak in 2002, showing that the DRAM industry still favors the business environment for 12-inch wafer foundries in the medium term. According to an industry estimate, nearly six 12-inch wafer foundry plants will be built in Taiwan. ProMos had planned to offer NT$3 billion worth of GDRs overseas in the later half of this year. (Commercial Times, Taiwan)