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To: Zeev Hed who wrote (3810)	9/16/1998 10:06:00 PM
From: Scotsman	Respond to of 4697

To: Jim Goodman (3967 ) From: DJBEINO Wednesday, Sep 16 1998 12:10AM ET Reply # of 3973 Korean chip makers will cut output in early October Sep 16, 1998 - Samsung Electronics and Korea's two other semiconductor chip makers will stop production of memory chips for four to seven days in early October in order to stabilize chip prices, according to industry sources. The sources said that the three companies, including LG Semicon and Hyundai Electronics Industries, would halt manufacturing of chips before and after the three-day Chusok holiday, which begins on a Sunday, Oct. 4. With the decision, Samsung and Hyundai have been cutting production once a month since June, and LG Semicon has reduced output since July. The sources noted that such efforts would reduce their memory chip production by about 30%. In this connection, the price of 64-megabit DRAM chips has recovered to US$10 from its bottom of US$7 early this year, according to the sources.

To: Zeev Hed who wrote (3810)	9/16/1998 10:07:00 PM
From: Scotsman	Read Replies (1) \| Respond to of 4697

Motorola to Halt Construction of $3 Bln Chip Plant as Demand, Prices Fall Richmond, Virginia, Sept. 16 (Bloomberg) -- Motorola Inc., the world's No. 3 chipmaker, said it's halting construction of a $3 billion computer-chip plant near Richmond, Virginia, because of low prices and demand for semiconductors. Construction will cease in ''days,'' said Scott Stevens, a Motorola spokesman. Motorola decided not to build the plant because '' the computer-chip market globally is in one of the worst downturns in history,'' he said. The Richmond Times- Dispatch first reported the halt. Nine months ago, Schaumburg, Illinois-based Motorola said it would build the plant in West Creek, Virginia, that was expected to employ 2,500 people and be the company's largest investment. Chip companies are struggling with weak demand and plunging prices amid slower personal computer sales and economic problems in Asia. Motorola said it will just break even in the third quarter because of plummeting sales of semiconductors, which account for about a quarter of its revenue. ''Given the current state of the semiconductor market, it doesn't make sense for (Motorola) to spend $3 billion to expand in semiconductors,'' said Gregory Geiling, an analyst at J.P. Morgan Securities Inc., who has a ''buy'' rating on Motorola. Motorola rose 1 3/16 to 45 1/8 in early trading. Total sales of computer chips are forecast to fall 2 percent in 1998 to $134.7 billion, according to the Semiconductor Industry Association. Prices for memory chips alone have fallen 70 percent in the past year. Jill Lawrence, spokeswoman for the Virginia Economic Development Partnership, said she expected any halt to be temporary. The government-created non-profit agency encourages economic expansion in the state. ''We're just crossing our fingers,'' she said. Plant In December, Motorola said site preparation for the Virginia plant would begin in the first quarter of 1998, with construction of five buildings starting in the second quarter. Motorola had said it expected to install manufacturing equipment in late 1999, and that shipments of products would begin by mid-2000. That was before the impact of the worldwide chip slump led Motorola to issue a profit warning in July and for the second time lower its expectations for industry-wide chip sales. It forecast a drop of as much as 12 percent this year. The gloomy forecast follows a plunge in Motorola's second- quarter earnings and lower sales in its chip, paging and satellite-equipment and cellular divisions. The company doesn't see a turnaround in the semiconductor industry until next year as the economic slowdown in Asia takes its toll. Chipmakers produce everything from processors that run on personal computers and the memory to store data to chips used in cellular phones and satellites. They have struggled recently with weak demand from makers of personal computers and Asian customers. That, along with excess manufacturing capacity at existing plants, has led chipmakers to slash prices to get rid of oversupply. That's hurt sales of chip-equipment makers as well. In North America, the semiconductor-equipment book-to-bill ratio, a closely watched gauge of the industry, fell to 0.69 in July from a year earlier as orders for machines used to make chips fell. A book-to-bill ratio of 0.69 means semiconductor- equipment makers got $69 of orders for each $100 of products shipped.