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

To: michael97123 who wrote (51229)	8/29/2001 9:01:42 AM
From: michael97123	Read Replies (1) \| Respond to of 70976

Thread, Woooptidoo, Its not down. We will not have an official recession. American consumers do not have to return the goods purchased with their tax rebate checks. Stevie sell those Dells!!! Seriously folks the market responding to what amounts to 3/10ths of a percent in the June quarter is ludicrous. Yesterdays selloff was silly too since it was based on lower consumer confidence numbers that are still in the expansion range, while at the same time consumers said they were positive about the future. Sorry for the run on sentence. MIke

To: michael97123 who wrote (51229)	8/29/2001 9:14:14 AM
From: Proud_Infidel	Respond to of 70976

LSI Production Capacity Insufficient to Fill Demand for 2002: Nikkei Market Access August 29, 2001 (TOKYO) -- Nikkei Market Access forecasts that LSI production capacity will not be sufficient to absorb demand for LSIs. That counters predictions by most industry observers, who have said that the economic malaise still prevails in the Japanese LSI industry. They fear that LSI demand will not rebound for a certain period of time. Surveys conducted separately by Nikkei Market Access and World Semiconductor Trade Statistics showed that it is likely that the combined production capacity of LSI makers will fall below the aggregate amount of demand for the full year of 2002 around the world. (see Chart 1) Demand for LSIs has grown at some 9 percent annually for more than a decade, from the late 1980s, in a 2.5-year demand cycle. This year demand for LSIs struck the bottom of the cycle. This suggests that LSI demand in 2002 will go up, and likely rise 20 percent from 2001. In the meantime, there will be an extremely small amount of inventory that can be carried over into 2002 because electronic device makers, or LSI consumers, are now strengthening efforts to cut back on their inventories. Likewise, LSI producers have begun forwarding capital spending on LSI equipment and plants to manufacture LSIs. Less inventory and inactive capital spending are creating insufficient levels of production, thus causing LSI shortages, Nikkei Market Access predicts. Device Makers Are Working on Inventory Adjustments Throughout 2001 Shipments of LSI products dropped sharply in the first half of 2001, against the background of a tremendous amount of inventories of electronic devices that have LSIs inside them. To reduce inventories, electronic device makers moved to temporally stop or cancel orders for LSIs, and in some cases, they urged LSI makers to take back already-shipped products. As electronic device makers are becoming more and more sensitive to an increase in inventories, there will be little chance of inventories increasing until the end of the year. Demand for LSIs will be more obvious, and less prone to inventory fluctuations. In other words, with the world economic weakness continuing and sales of electronic devices slowing down, demand for LSIs will recover as inventories become scarce. Moreover, new orders for LSIs are starting to be placed at the end of the year and into the first half of 2002. For example, electronic device makers already have begun talks for large LSI deals for manufacturing NTT DoCoMo Inc.'s new cellular phone in the 504 series, due in the spring of 2002. During the first half of 2001, device makers had talks with LSI makers over the development of new cellular phones, but fell short of making actual orders for LSIs. Now, device makers are seen moving into more business negotiations with LSI makers to discuss details of the deals. LSI Demand Grows 9 Pct. Yearly Based on monthly reports issued by WSTS on the world's LSI shipments, that is LSI demand, Chart 2 shows a yearly percentage change of the global LSI shipments for each month starting in 1988. The 12-month moving average shows LSI demand striking peaks every 2.5 years, providing evidence that demand for LSI was growing at an average of around 9 percent annual pace in the past during a period of more than a decade. There is a possibility that demand for LSIs in 2002 will rebound following a sharp drop in demand for LSIs in 2001. Demand for LSIs may advance by 9 percent or 18 percent in 2002. Actual demand for LSIs will come into the range. Production of 300mm Wafers May Surge in 2002 In 2001, LSI producers cut their spending on equipment and plants to boost production due to the sluggish world economy. However, the annual output capacity for 200mm wafers is expected to increase by 5 million units or so from a year ago, because LSI manufacturers already have invested money to boost capacity. For 2002, however, the rise in the actual production capacity for 200mm wafers will be some 1.5 million units. And capital spending on 300mm wafer production lines will remain weak because of LSI manufacturers' reluctance to raise the capacity for the time being. So far until the spring of 2001, Intel Corp. of the United States has been spending aggressively on 300mm wafers, but it revised downward its capital spending plan for 300mm wafers. The world's output capacity of 300mm wafers is estimated to be 320,000 units a month by the end of 2003. But, some LSI makers are beginning to shift their production focus from 200mm wafers to 300mm wafers, reflecting the recent sluggish world economy. If demand for LSIs starts increasing and LSI shortages are found to be evident in 2002, LSI makers will rush to boost production of 300mm wafers. The weakness in demand for LSIs may instead give momentum to LSI manufacturers' shift to 300mm wafers. Chart 1:Production capacity for each wafer size, demand for the LSIs For demand in 2001-2003, it should raise by in the range of 9% (at low) to 18% (at high) Notes: - The numbers from 2001 to 2003 are estimations. - Number of units are 200mm wafer converted Data from Nikkei Market Access, World Semiconductor Trade Statistics Chart 2:The growth rate for the number of LSI shipment Data from World Semiconductor Trade Statistics (Tamao Kikuchi, Nikkei Market Access) nikkeibp.asiabiztech.com