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To: Ian deSouza who wrote (27796)	1/8/1998 4:45:00 PM
From: BillyG	Read Replies (1) \| Respond to of 50808

Memory prices will remain low and go lower. Expect PC prices to continue their rapid decline..................... A service of Semiconductor Business News, CMP Media Inc. Story posted at 3 p.m.EST/noon PST, 1/8/98 DRAM price plunge will continue with Korean crisis and "cost holiday" By J. Robert Lineback PEBBLE BEACH, Calif.--South Korea's monetary meltdown will most likely fuel more steep cuts in DRAM and memory pricing in early 1998 because Korean suppliers now have a "cost holiday" resulting from currency devaluations against the U.S. dollar, said analysts during the annual Industry Strategy Symposium here this week. "About 55% of the DRAM manufacturing costs [in Korea] are won sensitive," said analyst Clark J. Fuhs, director of Dataquest's semiconductor equipment, manufacturing and materials program, based in San Jose. "The result is they can cut prices and still maintain a 'profit margin,'" he added, referring to the ability to skirt anti-dumping measures in the U.S. and European markets. That will be bad news for DRAM suppliers based outside of Korea, which have struggled with sharp price drops in 1996 and 1997. There is now a strong possibility that average selling prices for memories will drop an unprecedented third year in a row, said analyst Bill McClean, president of IC Insights Inc. of Scottsdale, Ariz. He told executives attending the conference that too much production capacity sent average DRAM prices down 60% in 1997 after a 65% drop in 1996. Nearly all financial and market analysts speaking at the conference said they now anticipate the DRAM market--now totaling about $20-22 billion--to remain in an oversupply condition until the first quarter of 1999. If so, worldwide DRAM revenues will be eroded and total semiconductor sales will most likely fall short of high-end growth estimates in the 17-20% range in 1998. All of those forecasts are based on a recovery in DRAM pricing. "For every $1 in the average selling price of DRAMs, total semiconductor revenues will rise or fall by 4 percentage points," McClean noted at the annual conference, hosted by the Semiconductor Equipment and Materials International (SEMI) trade group. Dataquest's Fuhs said Korean suppliers will be motivated to cut memory prices because they desperately need U.S. dollars to pay off loans and they want to maintain market share during the financial crisis. "The profitability of non-Korean suppliers will suffer," he added. But with the loss of profits in 1998, stalwart memory merchants might finally see light at the end of the DRAM recession tunnel. Industry executives and market observers believe a couple of major DRAM suppliers will opt to exist the market in 1998, if no recovery becomes apparent this year. "We must have capacity exist the market in for any kind of recovery," Fuhs said.

To: Ian deSouza who wrote (27796)	1/8/1998 5:07:00 PM
From: John Rieman	Respond to of 50808

More Phillips/Intel CPU debate......................................... ijumpstart.com Philips Scores in DTV Market <Picture><Picture><Picture> Philips Semiconductors' [PHG] is making in-roads into the Digital TV market with its TriMedia processor, and the chip supplier is expected to announce a deal with a Samsung Corp. U.S.-based subsidiary. Philips Consumer Electronics Inc. also has commited to use the TriMedia chipset in its DTV products. Samsung plans to incorporate TriMedia chips into set-top boxes in the fourth quarter, and San Jose, Calif.-based Samsung Information Systems America (SISA) is developing a software module that will enable the chip to convert programming broadcast in ATSC high-definition for playback on traditional NTSC TVs. This down-conversion process is similar to the approach Intel Corp. [INTC] is taking to market the Pentium II as a DTV option. The economic advantage Philips has over Intel, at least in the short term, is significant. Jack Chaney, manager of Samsung's Digital Media Lab, said the set-top implementation will require two TriMedia chips, which today sell for about $50 each in OEM quantities, offering OEMs a far more compelling sales proposition than adding a 300 MHz Pentium II. That Intel processor costs more than $700 now, and likely will sell for $200 to $500 in the fourth quarter, depending on pricing trends. Industry watchers agree Intel will have a hard time convincing OEMs to use the P II for the first wave of low-cost, down-converter boxes. "The economics for Intel don't pan out," said Michael Bernstein, an analyst with market research firm Semico. "The set-top boxes are going to have to be $200 or $300, otherwise the market isn't there." Will Strauss, an analyst with PC industry watcher Forward Concepts, said the Pentium II as the main processor for Digital TV products is a "pipe dream on Intel's part that makes no sense." "If the only tool you have is a hammer, every problem looks like a nail," he said. Neil Mitchell, Philips' marketing manager for Digital TV and TriMedia, offered a similar observation. "The Intel architecture carries a lot of baggage with it in terms of costs," he said. "I'm sure they have similar things in the works, but the question is in what time frame and at what cost." Intel's DTV Agenda Intel initially is likely to target vendors building high-end set-top boxes designed to display more than digital video. Tom Galvin, Intel's director of market development for digital broadcast and broadband, envisions the P II implementation into Digital TV hardware as a way to enable users to receive rich electronic publishing information and participate in electronic commerce. Moreover, Galvin expects Intel's pricing to be in line with a sub-$500 set-top once the market takes off in mid-1999. "Our ability to get that into a sub-$500 box will be very realistic and doable," Galvin said. "My guess is, you'll see an Intel architecture-based set-top box sometime in '98." The company also is very interested in getting a design win with the Windows CE operating system. It's debatable if Intel -- a company that prides itself on better than 30 percent margins -- can come out with a Pentium "light" chip to down-convert DTV without throwing its entire business model out of whack. Like Intel, Philips wants its chips to be a part of the DTV road map over the long haul. To that end, the company has developed a reference design that offers higher-grade capabilities with external hardware used for MPEG-2 decoding that can be built into a variety of DTV products. (Forward Concepts, 602/968-3759; Philips Semiconductors, 408/991-2332; Samsung Media Lab, 408/544-5470; Semico, 602/997-0337)

To: Ian deSouza who wrote (27796)	1/9/1998 4:03:00 AM
From: Ed's Head	Read Replies (1) \| Respond to of 50808

Ian deSouza: I have noted recently that there has been some... deviation between the DJIA and the NASDAQ. For example at one point the Dow was down nearly 100 points while the NASDAQ showed resilience and held in positive territory. This sudden new phenomena has occurred more then once early in this new year. It's my opinion that blue chip money is getting tired and looking for value in the small and mid-cap issues. Could we be seeing the early stages of rotation, and perhaps a clue depicting that technology will be a performer in 98? good luck c-ya!