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To: shane forbes who wrote (14775)	9/4/1998 4:12:00 PM
From: patrick tang	Read Replies (1) \| Respond to of 25814

TSMC used to do 50% margins in good times. I believe this summer they are running at only 70% capacity. Thus TSMC's ADR is down to $10 from $20 just 2 to 3 months ago. (symbol TSM) As for LG and Syundai 'merger', it would take a miracle 'cause neither one of them want to give up control/get out of business but neither one of them really can stay in with their huge debts. To me the Korean threat is over, save for the huge overhangs of 16M/0.35um DRAMs fabs that are being turned into logic foundries. Hyundai said they want to do logic chips and foundry business at 0.35um. But they did not give any road maps to 0.25um and below. To me that is nothing but an admission they understand they are seriously cutting back on semis because they do not have money to convert the lines to deep UV. All the talk about 'logic' and 'foundry' stuff is just a way of trying to squeeze an extra buck out of the tired 16M fabs. As to what 0.21um DRAMs can do - a good yielding wafer would get you 400 die. At current market price of $10, that's a $4K wafer, more than enough to move the business forward. Regarding new money, even the Taiwanese are stopping after a lot of them lost their shirts e.g. Kuotech's 0.35um 8" fab being swallowed up by UMC because they could not make it yield. And of course Charter has never really threatened. Thus I predict a huge undercapacity when we get to below 0.25um. If I am right, then shortage is right around the corner , starting before next summer when 0.20um logic gets ramped (0.2um DRAMs are already getting ramped right now). I can just see all those 150 to 2500mHz chip sets, graphics, single chip Windows CE appliances (with 8M to 16M DRAM built in), 256Mbyte DRAMs for digital TVs, gigibit networks & routers, finally cable modem and xDSL get deployed and that drives high powered PC for video etc. etc. Can't do that stuff in old 0.35um 16M DRAM fab. patrick