Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Cymer (CYMI) NEWS ONLY! -- Ignore unavailable to you. Want to Upgrade?

To: craig crawford who wrote (165)	11/14/1997 8:53:00 AM
From: Paul Dieterich	Read Replies (1) \| Respond to of 582

Acer delays new fab, but updates exs. fabs beyond .35: TI-Acer to Scale Back Capacity As Memory-Chip Prices Drop November 13, 1997 By RUSSELL FLANNERY AP-Dow Jones News Service HSINCHU, Taiwan -- Texas Instruments-Acer Inc., one of Taiwan's largest semiconductor makers, will scale down spending on new capacity amid a drop in international computer-memory-chip prices and unexpected losses this year, a senior executive said Thursday. TI-Acer's board of directors at a meeting last month decided to delay $470 million of spending on equipment for manufacturing chips at a new facility in Hsinchu, said Vice President and Chief Financial Officer Lora Ho. The company won't consider spending the money until market conditions improve, Ms. Ho said. The change in plans hasn't been formally announced by the company, a specialized maker of dynamic random access memory, or DRAM. TI-Acer is 48% owned by Taiwan computer industry leader Acer Inc. and 33% by Texas Instruments Inc. The move to slow increases in production capacity comes after a plunge in the average spot price this year for DRAM, the most widely used memory chips in the personal-computer industry. Taiwan is the world's third-largest maker of personal-computer equipment and one of the five largest makers of semiconductors. Average DRAM spot prices have declined from about $9 to $4 in the past six months, said Ms. Ho. New pressure on prices resulting from a decline in the Korean won against the U.S. dollar in recent weeks makes it difficult to say where the market will bottom out, Ms. Ho said. South Korea is one of the world's largest makers of DRAM chips. "We think that prices won't recover in the coming few months," Ms. Ho said. TI-Acer forecasts a 1997 loss of 1.87 billion New Taiwan dollars (US$60.3 million), down from an initial forecast made earlier this year of net profit of NT$660 million. TI-Acer isn't the only specialized Taiwan DRAM maker to be suffering from low prices. Vanguard International Semiconductor Corp., an affiliate of Taiwan's largest semiconductor manufacturer, said in a statement Thursday it will cut its forecast of 1997 net profit by more than 20%. Vanguard is 27% owned by Taiwan semiconductor industry leader Taiwan Semiconductor Manufacturing Co., whose chairman Morris Chang in Singapore on Thursday predicted that chip prices may continue to decline for as long as eight months. Even though it will delay the planned purchase of new equipment for its number-two plant, TI-Acer said last month it will spend $400 million to improve its production technology at an existing facility, Ms. Ho said. As part of that project, the company will phase out processing of six-inch silicon wafers in favor of eight-inch ones, and narrow the width with which it can slice chips to 0.28[sic?] micron from 0.35 micron. The changes will lower average production costs and increase competitiveness, analysts said. The new spending will also allow TI-Acer to produce relatively advanced 64-megabit chips. It produces only lower-capacity 16-megabit chips. That shift to relatively advanced products will help reverse losses at TI-Acer, according to the company, which last month predicted net profit in 1998 will total NT$2.6 billion. With an improvement in its financial results expected next year, this year's lower chip prices and losses aren't likely to hurt the company's current bid to list its shares on Taiwan's Over-the-Counter Securities Exchange, said Ms. Ho. TI-Acer has said it expected to list its shares before the end of April 1998.