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To: Katherine Derbyshire who wrote (6203)	7/6/1998 9:51:00 AM
From: Paul Dieterich	Respond to of 10921

Macronix cuts fab spending 73% A service of Semiconductor Business News, CMP Media Inc. Story posted at 2:45 p.m. EDT/11:45 a.m. PDT, 7/2/98 By Sandy Chen TAIPEI, Taiwan --Taiwan's semiconductor industry continues to pull back after the finally feeling the side effects of the Asian financial flu. The latest chip maker to announce a cutback in capital spending is Macronix International Co. Ltd., which is cutting its 1998 capital expenditures by 73% to $87.1 million compared to its previous budget of $319.3 million. Taiwan's largest supplier of EPROMs, flash memories, and ROMs has throttled back its manufacturing expansion plans after a period of rapid growth, said Miin Wu, president of the Hsinchu-based company. "Our capacity has grown 70% compared to last year, while our sales grew 45% in the first five months of 1998,'' Wu explained. "We still have ample capacity to meet our customers' demand." The move comes after Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) announced it was cutting its 1998 capital spending by $380 million to $920 million (see June 30 story). The world's largest pure-play silicon foundry said it might also trim its production investments in 1999 as a result of slow growth in the chip industry. Macronix' total capacity is about 35,000 six-inch wafers and 12,000 eight-inch wafers per month. The company's 6-inch wafer fab is processing silicon with a 0.4-micron technology, and its 8-inch plant is running 0.25-micron technology. In the first and second quarter of 1998, the company's 6-inch fab had a utilization rate of 70%, while the 8-inch plant was running at a 50% rate, Wu reported. Macronix has co-developed flash memory chips with Philips Electronics NV's semiconductor unit, and it is currently shipping these chips. In 1997, Matsushita Electric Industrial Co. Ltd. licensed its 16- and 64-Mbit DRAM process technology to Macronix.