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To: Michael Sphar who wrote (68)	8/28/1998 5:01:00 PM
From: Michael Sphar	Respond to of 105

DRAM competition in Asia, driving shift to 64Meg: A service of Semiconductor Business News, CMP Media Inc. Story posted at 2 p.m. EDT/11 a.m. PDT, 8/28/98 Japanese, Korean DRAM makers to hold equal market share in '98 TOKYO--Japanese and South Korean memory firms will close out the year running neck-and-neck in 64-Mbit DRAM production, according to a study released here this week. Nikkei Market Access, a Japanese research firm, projects that both countries will hold 37.6% share of the worldwide manufacturing capability for the memory device in 1998. The memory industry is rapidly switching from the 16-Mbit DRAM chip to the 64-Mbit version. This switch has ramped up this year, partly in response to the DRAM price woes as memory companies attempt to bring the more dense device to market in order to garner higher profit margins in an industry where significant profit margins have been placed on the endangered species list. According to the report, Japanese chip companies began shifting from 16-Mbitt chips to 64-Mbit chips last fall. The Korean companies, shaken by the collapse of their economy at the tail end of 1997, did not begin the transition until the second half of this year, but are quickly catching up. The entire market for 64-Mbit DRAM is expected to expand from 80 million units in 1997 to 680 million units this year. American and European memory companies are also making the move, and the two regions should account for 21.1% of the total market for the higher density chip by the end of the year. Another major memory transition this year is the move to adopt 100-MHz bus speeds, for use with faster microprocessors and chip sets in PCs. Nikkei Market Access notes that Japanese companies have the edge in this area as well. With the Korean memory firms not expected to adopt the faster technology until 1999, the research house says the supply of 100- MHz DRAM will not meet demand this year.

To: Michael Sphar who wrote (68)	8/28/1998 5:10:00 PM
From: Michael Sphar	Read Replies (5) \| Respond to of 105

More DRAM inflicted pain and suffering, this time Taiwan: A service of Semiconductor Business News, CMP Media Inc. Story posted at 3:15 p.m. EDT/3:15 p.m. PDT, 8/28/98 Acer, Mosel-Vitelic become victims of Taiwan's chip slump By Sandy Chen TAIPEI, Taiwan -- It's going from bad to worse in Taiwan. Acer Semiconductor Manfuacturing Inc. (ASMI) and Mosel-Vitelic Inc. are the latest chip makers in the island country to announced lower-than-expected financial results in 1998. Battered by a slowdown and pricing pressures in the memory market, Mosel-Vitelic revised its 1998 sales and profit projections downwards by an estimated 29.3%, and 86.5%, respectively. The DRAM maker expects its 1998 sales to reach only $373 million in 1998, compared to $527.3 million in its original forecast. The company's net income will is expected to be just $7.9 million, compared to the original forecast of $58.6 million. In the first half of 1998, however, Mosel-Vitelic's sales grew by 39.2% to $139.3 million, compared with $100.1 million in the like period a year ago. But the company reported a loss of $18.6 million in the first half of this year, compared to a profit of $37.8 million in the same period a year ago. "The main reason [we revised our forecast] was that DRAMs prices did turn out to be what we had expected,'' said William Chen, executive vice president of Mosel-Vitel. ''Margins also went down, but our sales are still growing.'' Meanwhile, Hsinchu-based AMSI, the new IC-wafer foundry subsidiary of Taiwan's Acer Inc., revised its 1998 sales forecast downwards by 54.3%, while also projecting more red ink. The company originally projected sales of $371.8 million and a loss of $34.6 million in 1998. Now, Acer Semiconductor said its sales will only hit $170 million, with losses expected to reach $141.2 million. In the first half of 1998, ASMI reported sales of $86.5 million, a 43% declined compared to $151.7 million in the like period a year ago. It lost $92.2 million in the first half of 1998. In the same period a year ago, it reported a loss of $19.2 million. "ASMI is in transition, so our production was less than what we expected," said a spokesman for the company. ASMI is shifting its role from a pure DRAMs maker to a multiple role as both an independent design manufacturer (IDM) and foundry. Analysts said ASMI and Mosel-Vitelic are the victims of a DRAM downturn. "The main reason why these companies adjusted their forecasts was because of a drop in DRAM prices,'' said Fred Lin, fund manager for China Securities Investment Trust Corp. in Taipei. "The revised forecast among those companies is more realistic.''