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To: vinh pham who wrote (380)	5/13/1998 12:19:00 PM
From: Mark Oliver	Respond to of 723

South Koreans to manufacture next-generation chips in 1999 May 12, 1998 Source: Nikkei America Demand Expected To Begin Rising For 256M DRAMs Major South Korean semiconductor makers will start turning out next-generation memories in 1999 in anticipation of growing demand. LG Semicon Co. has resumed construction of a plant in Wales in the U.K., with plans to begin production in mid-1999. Samsung Electronics Co. also plans to start production in early 1999 by remodeling an existing plant in South Korea. Hyundai Electronics Industries Co. aims to begin production in 1999 by completing a plant in Scotland. Although the South Korean economy has not recovered from its recent crisis, domestic manufacturers will concentrate investment on 256-megabit dynamic random-access memories (DRAMs) and expand exports on the strength of the weak won. Major Japanese chipmakers made plans in the summer of 1997 to build such chips in 1999. However, the economic downturn prompted most to put off plans for large-volume production of next-generation memories until at least 2000. But the moves of their South Korean rivals are expected to spur the Japanese companies into taking similar steps. Demand for 256M DRAMs is expected to begin increasing rapidly in 2001. The overall DRAM market for that year is projected to stand at about 58 billion dollars. LG Semicon will revamp the production lines at its Welsh plant, which was originally to turn out 64M DRAM chips, to make it a plant for 256M chips. A plant which can produce next-generation DRAMs costs around 150 billion yen (1.1 billion dollars) to build, about the same amount of money expected to go into the Welsh plant. Samsung has installed a facility for 0.18 micrometer processing at an existing 64M DRAM plant in South Korea, and has begun manufacturing 256M chips on a trial basis. The company has started shipping samples to personal-computer makers and aims to begin mass production as early as possible in 1999.

To: vinh pham who wrote (380)	5/13/1998 12:43:00 PM
From: Mark Oliver	Read Replies (1) \| Respond to of 723

Seems like we've seen some degree of strengthening in in circuit board manufacturing. There have been a series of upgrades this week. The following came again out today. Flextronics International Ltd. (FLEXF) 48 1/2 -1: Deutsche Morgan Grenfell initiates coverage of turnkey manufacturer of electronics components with "accumulate"..... Solectron Corp. (SLR) 46 1/16 -3/16: Deutsche Morgan Grenfell initiates coverage of electronic manufacturing services provider to OEMs with "accumulate".. Jabil Circuit (JBL) 37 15/16: Cowen & Co. upgrades circuit board manufacturer from "hold" to "buy"... And then you have Applied Materials. Seems like there is a mixed view on what's coming, but I feel it's not looking so good for front end equipment suppliers. The previous article I posted about moving to higher density DRAM is positive, but then how much is it favorable for a refitting of an existing plant vs a totally new fab? Anyway, it seems like the market is not ready to dump AMAT and that's good for ESIO. Applied Materials Inc. (AMAT) 37 7/8 -1/16: --UPDATE-- Adams Harkness lowers earnings estimates on semiconductor wafer fabrication equipment maker as conditions in Japan continue to deteriorate; latest results were in line, but Q3 guidance is for orders of $850 to $1 bln, revenues of $925-$975 mln and EPS of $0.20 to $0.23 a share; management expects orders to bottom some time between Q1 and Q3 of FY99, as DRAM producers begin new fab construction; management does not expects an upturn in semi capital expenditures until second half of calendar 1999; continues to rate issue "market perform" while lowering FY98 from $1.46 to $1.33 and FY99 from $1.46 to $1.10 a share..... Applied Materials Inc. (AMAT) 37 1/2 -7/16: --UPDATE-- BA Robertson Stephens downgrades semiconductor wafer fabrication equipment maker from "strong buy" to "buy" following the release of its Q2 results which matched Wall Street expectations..... Applied Materials Inc. (AMAT) 37 15/16 +11/16: semiconductor wafer fabrication equipment maker posts a fiscal Q2 net of $0.37 a share, in line with the First Call estimate, vs year-ago profit of $0.27; sales rose 31% to $1.18 bln; company remains cautious over near-term outlook, however..... And then you have Teradyne. It seems again that there is a question between firms on how demand for test equipment is going. I don't see it as a straight comparision to ESI, but I often feel more is told by test figures than front end. Teradyne (TER) 36: BA Robertson Stephens downgrades from "buy" to "long-term attractive"... Any thoughts on what's happening with Vision? Are we waiting to see with KLIC, or are we starting to see any progress? SemiconWest coming to the rescue in June. Do you think we'll trade down until then, and see a little upturn as things are more clear in a month and more opinions are expressed in public? Do you think we'll see much happening in laser correction for Flash memory? There is a big move to flash that will bepowered by Windows CE and palm computers. These systems won't have hard drives as they take too much power. Digital camera are also building momentum with their demand for flash. The capacity points on these chips are getting very high. Must be some need for yield repair. In the conference call, they said there was new demand coming for yeild repair. Do you remember what it was for? Embedded memory? Regards, Mark