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To: Pat Hughes who wrote (79047)	10/11/2001 12:44:23 AM
From: Don Green	Respond to of 93625

Pat Hughes > "Moron" needs no explanation. A Moron, is unable to explain.

To: Pat Hughes who wrote (79047)	10/11/2001 12:53:08 AM
From: Don Green	Respond to of 93625

Korean chip makers brace for tough quarter By Kim Miyoung , Reuters Oct 10, 2001 (10:45 AM) URL: /story/OEG20011010S0046 SEOUL -- South Korean chipmakers are bracing for their worst quarter ever as last month's suicide attacks on the United States dashed hopes for an early recovery and sparked a series of earnings downgrades. Spooked investors have pushed chip shares to levels that are downright cheap, but analysts have held back on buy recommendations, citing a gloomy outlook for the depressed sector. After cutting its forecast for chip sales growth, ABN AMRO reiterated on Tuesday its ``reduce'' recommendation on chip titan Samsung Semiconductor due to dismal prices for DRAM (dynamic random access memory) chips which mainly go into PCs. The semiconductor industry will see sales growth slow to a long term average of 10 percent, against the 14 percent stock markets have factored into current share prices, ABN AMRO analysts said. Merrill Lynch also trimmed its earnings estimates on many semiconductor firms, saying it sees a 15 to 20 percent drop in semiconductor capital spending in 2002, rather than the three percent decline predicted in August. Samsung said it plans to announce its third quarter earnings results around October 22, while cash-strapped Hynix Semiconductors said results would come out around October 19. Shares of Samsung Electronics, the world's top memory chip maker, have shed more than 35 percent from this year's high of 235,000 won ($181.2). Hynix Semiconductor has plunged 83 percent. The benchmark Korea Composite Stock Price Index has lost 19 percent from the year's peak of 633.16. ``Prices of SDRAM (synchronous dynamic random access memory) chips, one of Samsung's main products, have fallen 50 percent quarterly,'' Jeon Woo-jong, head of corporate research at SK Securities, said in a report. ``That would have pushed Samsung to post an 89 percent year-on year drop in net profit in the third quarter,'' Jeon said. SK said it expected Hynix, formerly Hyundai Electronics, to see a shortfall of 853 billion won in the third quarter. Chipmakers are seeking to pare losses stemming from plunging chip prices by establishing alliances and entering emerging markets. Samsung also has relied on its handset and home appliance divisions to sustain profitability. Hynix, which has sought to sell non-chip assets to reduce debt levels, said it was now considering selling its surplus chip fabrication and tying up with a major semiconductor company. Samsung also said it will establish a chip sales unit in China in a bid to bolster its position in the burgeoning market. ``With the global chip market suffering from a supply glut, growth potential in the Chinese market will provide some breathing room to domestic chip makers,'' said Choi Suk-po, senior analyst at Meritz Securities. ``But as long as consumers remain reluctant to open their wallets and increased demand in PCs does not emerge, the pain of chip makers may go on longer than most have thought, probably until 2004,'' said Choi.