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To: Mr. Aloha who wrote (11442)	12/12/1997 3:51:00 AM
From: Asymmetric	Read Replies (1) \| Respond to of 25960

Hyundai Mulls Delaying Building Semiconductor Plant in Scotland The Wall Street Journal Interactive Edition -- December 12, 1997 By MATTHEW ROSE Staff Reporter of THE WALL STREET JOURNAL LONDON -- In an abrupt turnaround, Hyundai Group is considering delaying completion of a three billion pound ($4.95 billion) semiconductor plant in Scotland as a result of continuing turmoil in Asia. There is a "serious risk" that the South Korean conglomerate could postpone further work on the plant, a Hyundai spokesman in Scotland said. Speculation about the future of the Dunfermline-based semiconductor complex increased this week because of South Korea's increasing economic woes and signs that the country's big conglomerates -- or chaebols -- are scaling back investment plans. Hyundai had maintained that the project wasn't under review and that management remained "fully committed." Events Overtake Plans But events of the last two weeks have altered the company's thinking, the spokesman said, although he added that the plant remains strategically important to Hyundai's plans. The Korean giant, which produces an array of industrial goods such as cars, semiconductors and steel products, recently said it intends to cut its overseas investment by 30%. A decision on the Scotland plant could come as early as Friday, when Hyundai officials from Europe will meet with company executives in Seoul. Hyundai's move would be the latest in a series of investment pullbacks by Korean companies in Europe. Electronics giant Samsung has shelved plans for a 450 million pound investment in a U.K. plant manufacturing microwave ovens, color television sets and computer monitors. Daewoo Group is putting on hold plans to invest in three new French plants, according to French government officials. A delay of Hyundai's Scottish plant could hurt the local economy, which had expected to see around 2,000 jobs created by the investment. Korean companies have invested more than $1 billion in British industrial projects, according to the Bank of Korea, excluding the Scottish chip plant and LG Electronics Co.'s 1.7 billion pound semiconductor factory and television plant in Wales. Chip-Production Worries The delay also could stymie Hyundai's bid to become a producer of quality semiconductors. Most Korean chip makers churn out dynamic random access memory chips, which are highly vulnerable to cyclical swings. Prices have been falling for the last two years and are expected to continue falling next year. The Dunfermline plant, if it becomes fully operational, will produce higher-margin products such as 64-bit chips, designed to drive the next generation of high-end electronic consumer goods. Phase One of construction is almost complete and the company is employing 800 people on the site. Company executives are now considering the viability of Phase Two, which involves the purchase of expensive chip-making equipment. A long delay could throw Hyundai's production timing into disarray. Generally chip makers plan their production three or four years in advance. The fallout is likely to be widespread. Investors and analysts fear there will be a slump in demand from Asian companies like Hyundai for ASM Lithography NV's expensive 64-bit-chip- making devices. Those concerns, and the recent global sell-off in technology stocks, sent shares of the Dutch semiconductor equipment maker lower to close at 121.50 guilders($60.32), down 12%, or 16.90 guilders.