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To: Paul Engel who wrote (159282)	2/19/2002 3:09:32 PM
From: Paul Engel	Respond to of 186894

MAD's new partner bails out of a new fab with a previous partner !! I'd say MAD is getting into bed with a flaky partner ! The precedent has been set ! UMC exits joint venture with Hitachi By Bill Clifford, CBS.MarketWatch.com Last Update: 2:15 AM ET Feb. 19, 2002 TOKYO (CBS.MW) -- Japan's Hitachi and Taiwan's United Microelectronics said Tuesday they will terminate a fledgling chip-making joint venture because of the semiconductor industry's continuing slump. Nagging accounting issues whack stocks Selling pressure builds amid reporting shift by IBM Disney exec says worst over for ad market Congress probes Wall Street post-Enron Sign up to receive FREE e-newsletters: Get the latest news 24 hours a day from our 100-person news team. Hitachi (HIT: news, chart, profile) will acquire UMC's entire 40 percent stake in Japan-based Trecenti Technologies by the end of April for approximately 10.7 billion yen ($80.5 million) Trecenti is capitalized at 30 billion yen. The joint venture, which began manufacturing 300 mm (12-inch) wafers in March 2001 and has never operated above 50 percent capacity, will become a wholly owned subsidiary of Hitachi. Shares of UMC, the world's second largest chip foundry, shed 3.5 percent to close at NT$44.00 in Taipei. The Taiwan Weighted index fell 1.8 percent, or 106.95 points, to 5,861.66. While UMC is getting less than it put into its Trecenti investment, the pullout allows the Taiwanese company to shed excess capacity amid the chip downturn. Said UMC general manager H. J. Wu, "the current industry slowdown makes it necessary for us to concentrate our resources" on building 300 mm operations in Taiwan, its majority-owned joint venture in Singapore with Germany's Infineon (IFX: news, chart, profile)and a new 50-50 joint venture with Advanced Micro Devices (AMD: news, chart, profile). UMC and AMD agreed on Jan. 31 to build a 300 mm wafer plant in Singapore. In Tokyo, Hitachi shares slid 1.8 percent to 806 yen. The Nikkei 225 Average fell 2.4 percent, or 246.09 points, to 9,847.16. See Asia Markets. Hitachi said it would use Trecenti -- the world's first chip-making plant to use 300 mm wafers, and the only one in Japan -- as its most advanced fab for making system LSIs, flash memories and SRAM chips. Hitachi expects an operating loss in semiconductors of 127 billion yen ($955 million) operating loss in semiconductors for the fiscal year through March 31. At the entire group level, Hitachi projects a net loss of 230 billion yen. Bill Clifford is Asia bureau chief of CBS.MarketWatch.com