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To: Holyman who wrote (11027)	12/4/1997 9:56:00 PM
From: BillyG	Read Replies (1) \| Respond to of 25960

Foundry business is growing......................... A service of Semiconductor Business News, CMP Media Inc. Story posted at 4:30 p.m. EST/1:30 p.m. PST, 12/3/97 Buildup in chip foundries could put pressure on major players By Mark LaPedus TAIPEI, Taiwan -- After posting strong growth in the second half of 1997, the worldwide silicon foundry business could be headed for difficult times--at least in early 1998, according to industry analysts and chip executives. Increasing competition from new foundry players in Asia, coupled with the falling currency in South Korea, could also put pressure on wafer prices in the near future, said James Hines, principal analyst for semiconductor contract manufacturing services at Dataquest in San Jose. "The currency devaluations could impact the foundry market. This could cause some competitors like (South Korea's) LG Semicon to lower their foundry costs in order to keep their fabs full,'' Hines said, in a speech given earlier this week at the Industry Strategy Symposium (ISS) in Taoyuan, Taiwan. The ISS was sponsored by the Semiconductor Equipment and Materials International (SEMI) trade organization and the Taiwan Semiconductor Industry Association (TSIA). South Korea's three major chip makers--Hyundai, LG Semicon, and Samsung--have dabbled in the foundry business for years. However, South Korea boasts a new, dedicated foundry player, Amkor Technology Inc., which has just opened its doors for business (see Nov. 10 story). Meanwhile, several new foundry competitors are emerging in China and Taiwan. And, the well-established foundry players from Singapore and Taiwan are expanding their fab capacities rapidly. This has prompted many competitors in the wafer foundry business to suggest there could be an overcapacity situation developing in the segment. John Hsuan, chief executive of domestic operations at Taiwan's United Microelectronics Corp. (UMC), said the Hsinchu-based company's wafer fabs are fully-booked at least until January 1998. Beyond that, however, Hsuan was unclear, if not a bit pessimestic, about demand for wafer foundry services. "We see a little softening in the first quarter of 1998,'' Hsuan said. Others are more bullish about 1998. "I'm optimistic,'' said Morris Chang, chairman and chief executive of Hsinchu-based Taiwan Semiconductor Manufacturing Co. (TSMC) Ltd., at the company's 10th anniversary party earlier this week. In a recent interview, Chang expected TSMC to acheive 20% growth in 1998, due to continued demand for its foundry services. Even Dataquest is optimistic--at least about the industry's growth. The worldwide wafer foundry business is expected to fall to $6.464 billion in total sales in 1997, from $6.506 billion in 1996, according to Dataquest. However, the foundry business will rebound during the next few years, to $7.967 billion in 1998, and to $10.663 billion in 1999, Dataquest said. By 2001, the wafer foundry business will hit $15.46 billion, they added.