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To: robert b furman who wrote (2647)	1/30/2002 7:40:51 AM
From: Proud_Infidel	Respond to of 7827

Here comes the "A" word...... Hynix says it has put all DRAMs on allocation Company creditors expected to meet this week on whether to continue talks with Micron By Jack Robertson EBN (01/29/02 22:12 p.m. EST) Hynix Semiconductor America Inc., San Jose, Tuesday said it was putting all DRAMs -- both single data rate and DDR products -- on allocation for the remainder of the first quarter. The firm claimed that increased demand and a supply shortfall prompted the action. Hynix announced its allocation plan late on Tuesday after other DRAM vendors had left their offices and were unavailable for comment. "Due to recent increased demand and a supply shortfall, Hynix has elected to apportion memory products to its strategic and contractual customers for the remainder of the first quarter 2002," the company said in a released statement. So far Hynix is the only DRAM vendor to impose an allocation system. A check just last week of other DRAM vendors showed that although the supply of DDR and 256-megabit density chips is tight, firms have been able to keep up with customer needs. Smart Modular Inc., Fremont, Calif. module maker, earlier Tuesday reported it has been able to get enough DRAMs in the market to meet its immediate needs. Hynix' action putting all types of DRAMs on allocation also contrasts with usual practices of apportioning selected devices that encounter critically short supply, not the entire DRAM lines. "The memory market is cyclical in nature -- experiencing oversupply and shortages," said Farhad Tabrizi, vice president of worldwide memory marketing for Hynix, in the released statement. "Customers can achieve a balance through strategic partnerships with their key DRAM suppliers, by forming long-term agreements and building solid supplier/customer relationships." Hynix' release explained market conditions as follows: "This latest surge in DDR and SDR SDRAM consumption at Hynix has been driven by a number of factors occurring in the industry. Personal computer prices have become more affordable as a result of the introduction of the Brookdale Chipset supporting Intel P4 with SDR and DDR, a reduction in P4 pricing, and a growing appetite for more memory to operate the most advanced operating systems such as, Microsoft Windows XP. "In addition, an increase of sales in consumer electronics such as DVD, set top boxes and handheld devices, has also fueled memory demand. "At the same time, inventory levels have been bled off while a number of memory suppliers consolidated and cut back capacity due to IC manufacturers suffering the worse year in history. Plans for new 12-inch wafer fabrication plants have been slow to materialize due to a substantial required investment and no new 8-inch wafer fab capacity has been added," the statement added. Separately, Hynix Semiconductor Inc. creditors will meet Thursday to consider their next step after Micron Technology last week refused to budge on its offer of $2.5 million to $3 million for taking over seven memory fabs of the Korean chip maker. Micron on Monday said discussions with Hynix had ended with no agreement and no further talks were scheduled at this time. However, sources believed Micron had left the door open to resume discussions if Hynix and its creditors backed off their demands for a price several billion dollars above the U.S. firm's offer. It is believed the creditors Thursday willdebate whether to modify their demands and approach Micron once more, but with a proposal closer to the terms that the U.S. memory maker is asking.

To: robert b furman who wrote (2647)	1/30/2002 4:19:17 PM
From: Proud_Infidel	Respond to of 7827

While we wait for earnings..... Taiwan's chipset makers predict strong recovery By Faith Hung EBN (01/30/02 12:37 p.m. EST) TAIPEI, Taiwan -- Taiwan's chipset design companies reported declining results for 2001 as stiff competition and soft PC demand worldwide ate into profits. Via Technologies Inc., the No.2 core-logic chipset design house after Intel Corp., said net income slid 23% from 2000 to $151.1 million. Silicon Integrated Systems Inc. lost $13.6 million, widening from $6.5 million during the same period. “Last year was pretty bad for the industry as consumer and corporate confidence stayed low,” said Chen Wen-chi, president of Via, Taipei, Taiwan. But while profit fell last year, “Via believes the industry has hit the bottom because things can't get any worse” following the September 11 terrorist attacks, added Chen. He predicted sales over the next few years will grow 20% annually, compared with $974.3 million achieved in 2001. SiS's president Samuel Liu also sees company sales to climbing more than 30% this year from $285.1 million in 2000. With increased rivalry from Hsinchu-based SiS and an ongoing lawsuit with Intel, Via cut its chipset prices to lure motherboard customers such as Elitegroup Computer System Inc., a tier-one board maker that has manufacturing facilities in Taiwan and China. Shipment of Via's chipset featuring the Pentium 4 processor fell short of the 3-million-piece target expected by Via for the fourth quarter, helping drag down the company's gross margins to 37% last year, compared with 42% a year ago. Intel and Via have been in legal disputes for nearly half a year on the processor and supporting chipset technologies, making tier-one motherboard companies like Asustek Computer Inc. and Microstar International Inc. unwilling to use Via's P4x 266 chipsets. On the other hand, Intel has granted SiS a license on P4, allowing it to win orders from Taiwan's Asustek and MSI. Diversification To reduce its dependence on chipsets -- which now represent 80% of Via's sales -- Via is planning to diversify into products such as optical disk drive ICs. “We're expecting chipsets to account for 50% of company sales in less than two years with more new product offering,” Chen said. Some of the most significant products Via has introduced are single chip IC used in CD-ROM, CD-RW, DVD-ROM and DVD-RW. That puts Via in a position to challenge MediaTek, the world's biggest CD-ROM IC design house and a unit of silicon foundry giant United Microelectronics Corp. Via is specifically targeting some Japanese OEMs and Taiwan's Aopen Inc. by offering prices 20%-25% lower than MediaTek's, according to Salomon Smith Barney in Taipei. Even though Via said that it wants to replace Mediatek in 2003 as the biggest player, it might not go as smooth as Via is hoping, some analysts said. “Unlike MediaTek, which uses a mixed mode design, Via employs a 0.22 micron CMOS digital process, which is stronger in fast products introduction but weaker in cost structure,” said Andrew Lu, SSB's head of regional research. He forecast Via to have a 25% gross margin on the CD-ROM IC, less than the 45%-50% margin that MediaTek, Hsinchu, Taiwan, now has.