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Technology Stocks : Texas Instruments - Good buy now or should we wait? -- Ignore unavailable to you. Want to Upgrade?

To: SteveG who wrote (3004)	2/9/1998 10:22:00 AM
From: SteveG	Read Replies (1) \| Respond to of 6180

<A> Hitachi and Texas Instruments End Joint-Venture Arrangement DALLAS -- Hitachi, Ltd. (NYSE: HIT) and Texas Instruments Incorporated (NYSE: TXN) today announced plans to discontinue their joint-venture arrangement for the production of dynamic random access memory (DRAM) chips in Richardson, Texas. TI intends to form a new wholly owned subsidiary which would purchase the assets of the joint-venture company, known as TwinStar Semiconductor Incorporated, and would hire all the former joint-venture employees. "This is a unique action that gives TI maximum flexibility in determining the best solution in the long run for this excellent facility," said Richard K. Templeton, president of TI's semiconductor group. "TwinStar's state of the art fab is capable of .25 micron technology, and has an experienced workforce well-trained in advanced manufacturing." Hitachi and Texas Instruments decided to discontinue the joint venture because of severe financial pressures on TwinStar, which began operations in 1996, just as DRAMs began an unprecedented and unforeseen price decline. The decline prevented TwinStar from building the adequate cash reserves necessary to sustain ongoing operations and invest in future growth. "This difficult decision was driven by a number of factors impacting the DRAM business," said Tadashi Ishibashi, executive managing director of Hitachi. "With the combination of severe price declines and overcapacity in the DRAM market, this action was the best solution for all concerned." Under the plans, the legal entity known as TwinStar Semiconductor would be dissolved by the end of the first quarter, with the operations transferring to the new TI subsidiary. In connection with these actions, both Hitachi and TI expect to recognize special charges. "As we noted in TI's fourth-quarter report, we continue to make improvements in technology to offset some of the financial pressures faced by joint-venture manufacturing operations in the current DRAM environment," Templeton said. "Additionally, TI and other joint-venture shareholders continue to explore further measures with respect to the joint-venture structures." Hitachi and TI announced plans to build the joint-venture facility in August of 1994 for the purpose of producing 16- and 64-megabit DRAMs. All chips produced by the joint venture have gone directly to Hitachi and TI for sale to their respective customers. Hitachi and TI have been cooperating on memory-chip research and development projects since 1988 when they teamed to share technology related to the 16-megabit DRAM. Cooperation was extended in 1991 and again in 1993 to jointly develop 64- and 256-megabit DRAMs. These proposed actions have no effect on these or other existing development agreements. The two companies each hold a 36.4 percent equity interest in the facility, with the remaining equity interest held by other investors. The proposed actions are contingent upon approval of TwinStar's stockholders and lenders and Hart-Scott-Rodino antitrust review. Hitachi, Ltd., headquartered in Tokyo, Japan, is one of the world's leading global electronics companies, with fiscal 1996 (ending March 31, 1997) consolidated sales of Y8,523 billion ($68.7 billion). The company manufactures and markets a wide range of products, including computers, semiconductors, consumer products and power and industrial equipment. For more information on Hitachi, Ltd., please visit Hitachi's Web site at hitachi.co.jp. At an exchange rate of 124 yen to the dollar. Texas Instruments Incorporated is a global semiconductor company and the world's leading designer and supplier of digital signal processing solutions, the engines driving the digitization of electronics. Headquartered in Dallas, Texas, the company's products also include calculators, controls and sensors, metallurgical materials and digital light processing technologies. The company has manufacturing or sales operations in more than 25 countries. Texas Instruments is traded on the New York Stock Exchange under the symbol TXN. More information is located on the World Wide Web at ti.com. =============== <A> Hitachi/Texas Instruments-2: Severe Financial Pressure Cited DALLAS (Dow Jones)--Hitachi Ltd. (HIT) and Texas Instruments Inc. (TXN) confirmed they will terminate the operations of TwinStar Semiconductor Inc., a joint venture dynamic random access memory (DRAM) chip manufacturer. In a press release Monday, Texas Instruments cited "severe" financial pressures on TwinStar caused by a drop in DRAM prices. Both Hitachi and Texas Instruments will take charges in the first quarter to disolve the venture. A First Call estimate of 21 analysts puts Texas Instruments' first quarter earnings at 51 cents a share. ============ <A> Hitachi/Texas Instrum-3:Texas Instrum To Buy TwinStar Assets Texas Instruments will form a new unit that will purchase the assets of TwinStar, hire all the venture's employees and continue making DRAMs while examining its long-term options regarding the plant. Texas Instruments, which makes semiconductors, and Hitachi, which makes electronics products, each own 36.4% of TwinStar, which produces 16- and 64-megabit DRAMs. A Texas Instruments spokeswoman said that although the company didn't have figures for the costs of terminating the venture and forming the new unit, she expected Texas Instrument's charge to be less than Hitachi's because Texas Instruments will retain the value of the plant in Richardson, Texas. A figure for Hitachi's charge has not been determined yet, a Hitachi spokesman said. The dissolution of TwinStar will not affect other projects between the two companies, Texas Instruments said.