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To: Carl R. who wrote (39378)	9/29/1998 10:55:00 PM
From: DJBEINO	Respond to of 53903

European Executive Expects 5%-8% Recovery In Chip Market PARIS -(Dow Jones)- The chief economist for Franco-Italian semiconductor maker STMicroelectronics NV Tuesday forecast a recovery for the chip market in 1999, but his numbers fell short of the bullish projections made Monday by an American research firm. STM's Jean-Philippe Dauvin expects the chip market for 1998 to fall 8.0% to 10% from its performance in 1997. For 1999, Dauvin estimated market growth at 5.0% to 8.0%. On Monday, U.S. research firm Dataquest Inc. estimated the world-wide semiconductor market would grow by 11.8% in 1999, with revenue of $155 billion. "I don't think 12% is out of the scope (of possibility), but I think we should be more around 5.0% to 8.0% growth" for 1999, Dauvin said. He added that Dataquest's estimate of a 6.0% market decline in 1998 was too optimistic, since it implies a strong rebound in fourth-quarter sales. "I think the Dataquest outlook for the fourth quarter is a bit rich," he said. The chip sector has been plagued by oversupply caused by lower-than-expected demand for personal computers and the Asian financial crisis, among other factors. Industry watchers have been trying to figure out when things might again begin to pick up. As an industry, "we built too much capacity" starting in 1994 and 1995, said Dauvin, who also chairs the World Semiconductor Trade Statistics group. "Then came the Asian issue, which is accelerating the purging of the system, but it is a very bitter pill which could last another one, two or three quarters." However, Dauvin said he felt that "in the third quarter and in the fourth quarter, we are near the bottom of the cycle" for the market. He said reduced capital expenditure by semiconductor companies, the growth of the sub-$1,000 category for personal computers, which has spread to Europe, and the closures of some production facilities all augured well for 1999. In fact, Dauvin said he expects there to be significant capacity shortage in a couple of years. Discussing reduced capital investment and production decreases, he said, "I think there will an overreaction as great as the reaction of the last two years," which led to too much capacity. Dauvin repeated his long-held assertion that there are good fundamental reasons to expect growth in the semiconductor market because of the ever-progressing technology advances and price declines.

To: Carl R. who wrote (39378)	9/30/1998 4:34:00 AM
From: Skeeter Bug	Read Replies (3) \| Respond to of 53903

>>MU currently has depreciation of a shade over $600million per year.<< please explain how depreciation generates any type of positive cash flow. i also want to know how you spend depreciation. i'm all ears ;-)

To: Carl R. who wrote (39378)	10/2/1998 5:39:00 PM
From: Skeeter Bug	Read Replies (2) \| Respond to of 53903

carl, i understand now that you understand depreciation. perhaps we can go back to the original post that doesn't make sense - even in light of your recent explanations. >>MU currently has depreciation of a shade over $600million per year. That combined with their $250 million on hand and the $100 million tax refund should fund the continued expansion, so long as they don't lose to much in the meantime. Even if they lose another $200 million over the next 12 months (which I don't think they will) this would still supply them with $750 million, so they should be fine for at least 12 months.<< you take $600m+250m+100m-200m=750m. the $600m is depreciation. you treat it as though it is $600m cash in the bank. how come? tia...