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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (7163)	9/15/2003 9:02:41 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 25522

China to cause IC downturn in '05, says TSMC's Chang By Mark LaPedus Silicon Strategies 09/15/2003, 3:40 PM ET SAN JOSE -- The semiconductor industry is in the midst of a recovery, with 11 percent growth expected in the business for 2003 and 17 percent for 2004, according to the top executive of Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) here today (Sept. 15, 2003). Speaking at a conference, Morris Chang, chairman of silicon foundry giant TSMC, also ignited some sparks, by saying that another semiconductor downturn is expected to take place in 2005, due in part to the new and emerging player in the IC industry: China. At present, China is building fab capacity at an alarming rate, causing Chang and others to believe that the IC market faces another cyclical round of semiconductor overcapacity by the 2005 time frame. By then, China's chip makers, which are smaller players right now, will have an impact in the overall IC supply/demand situation. "Will there be another recession in 2005? Yes. China will cause it," he declared during a keynote address at the Taiwan+China Semiconductor Outlook conference in San Jose. Ironically, for Taiwan and the rest of the IC industry, the dynamics of the semiconductor fab-capacity equation has gone full circle. The TSMC executive pointed out that China is now in a position to build up fab-capacity for the rest of this decade--much like what Japan's chip makers did in the 1980s and what providers from Taiwan and Korea accomplished in the 1990s. In a question and answer session after the presentation, Chang told the audience that China's foundry providers and IC makers are no longer a threat at just the "trailing-edge" part of the chip business. He said that China could potentially cause a capacity glut in both trailing- and leading-edge technologies. "It could be both leading- and trailing-edge technologies,' he said. After the presentation, Chang told members of the media that he remains bullish about the IC industry in both the short and long term. "The recovery has been happening," he said. "This year, the semiconductor industry will grow 11 percent. That's not bad at all." He projected 17 percent growth for ICs in 2004, with a mild downturn in 2005. "I expect near the end of 2005 or early 2006 that we will see a slowdown," he said, adding that the downturn of 2005 will look much like the mild overcapacity situation in 2000. Chang was still bullish about the overall IC industry. "I am expecting two or three years of solid growth,' he said.