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To: yousef hashmi who wrote (28060)	2/9/1998 9:40:00 AM
From: DJBEINO	Respond to of 53903

INTERVIEW: Winbond sees price recovery/higher capacity increasing sales AFX, Monday, February 09, 1998 at 02:25 ---- by Adela Lin ---- TAIPEI (AFX-ASIA) - Winbond Electronics Corp expects the recovery in product prices, its increased manufacturing capacity and growing global demand to boost company sales this year from the 12.70 bln twd posted in 1997. "The prices for static random access memory (SRAM) chips and dynamic random access memory (DRAM) chips will recover this year, but at a slow pace, " assistant vice president Hander Chang said in a telephone interview with AFX-ASIA. "Current prices still deviate from favourable levels ... the industry is looking to fully utilise capacity," he said. The semiconductor industry, however, can still expect improved profitability if "the market retains a good production-distribution order," Chang said. He said the Asian financial crisis does not seem to have had a direct negative impact on Taiwan-based integrated circuit makers, and instability in the region may actually keep the global supply of integrated circuits from "surging abnormally." "Timing is an important issue in this field ... the lack of resources amid the Asian financial crisis may lead to costly manufacturing equipment and shortage of liquidity in financial markets," Chang said. He said some semiconductor makers in the region, excluding Taiwan-based firms, rely heavily on bank loans for their growth and these companies' operations are suffering setbacks due to the region's financial situation. Such obstacles may keep those companies from boosting their capacity and may help product prices to recover, Chang said. The positive side of the regional financial crisis is that it provides an opportunity for companies to examine their fundamentals, he said. "Companies can take the chance to check their operations, capacity plans and technology," he said. Chang said his company's operations are healthy. "For instance, our strategic alliance with Toshiba on IC production has helped to strengthen our capability in technology ... such ties allow both parties to share resources for better efficiency in the utilisation of funds, " he said. Winbond is expected to benefit from growing global demand for SRAM and DRAM chips this year, he said. "International statistics providers estimate that the personal computer market this year will enjoy annualised growth of about 20 pct and it is reasonable to expect the components business to grow accordingly," Chang said. At the same time, Winbond will continue to expand its manufacturing capacity, Chang said. Its fourth fabrication plant commenced test runs in Nov 1997 and is expected to produce 64-megabit DRAMs by about March, he said. The monthly output capacity of the plant will be 15,000 pieces of eight-inch wafers by the end of the year, he said. Production is expected to be between 10,000 and 15,000 pieces a month. The company's processing technology is slated for upgrade to 0.25 or even 0.20 microns per unit by the end of this year, from 0.35 microns at the moment, Chang said. Advanced manufacturing technology can lead to better profits in the light of lower manufacturing costs, he said. It is also establishing a fifth fabrication plant which is expected to undertake pilot runs in the second quarter of next year, Chang said. The plant has a monthly capacity of 15,000 eight-inch wafers, he said. Chang said the fourth and fifth plants will make DRAMs that will carry either the Toshiba or the Winbond brand name. He said the company's fourth and fifth plants will be integrated device manufacturers and will offer no foundry services such as producing semiconductors per client design. Winbond's first and second fab plants are operating at full capacity of 25,000 pieces of five-inch wafers and 40,000 units of six-inch wafers per month respectively, Chang said. Winbond's third fab plant, which is in the construction stage, was damaged in an accidental fire in Oct 1996. Chang said the company had originally planned to allocate 11.3 bln twd to upgrade the third plant but the funds will be invested in its fourth site instead. Besides its core business, Winbond has diversified investments into other information industry-related businesses, including CD-ROM and integrated circuits packaging or assembly, Chang said. He said his company does not rule out the possibility of extending investments to other businesses, such as personal computers. "We are always looking for good opportunities to provide total solutions, " he said.