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To: NBS who wrote (4233)	11/10/1998 10:03:00 AM
From: DJBEINO	Read Replies (1) \| Respond to of 9582

NEC faces a sharp future From RORY McCARTHY of AFP 10nov98 TOKYO: The worldwide glut in semiconductors has done its worst, but fewer chip makers will survive growing competition in the future, according to a senior executive at Japan's electronics giant, NEC. "The first half of 1998 was the bottom. We had a very difficult time," NEC senior executive vice-president and semiconductor group head Hajime Sasaki says. The company was battered by the collapse in the price of dynamic random access memory chips (DRAMs), and tumbled into the red for the six months to September. NEC, the world's number-two chip maker behind Intel, took a 19.7 billion yen ($270 million) group net loss, its first for the half in four years. Now the firm is banking on good earnings in the large-scale integrated circuit (LSI) market and system-on-a-chip applications that combine memory and logic chips. "We will see a recovery in the memory market in the next fiscal year, and system LSIs will see strong growth," Sasaki says. The semiconductor market as a whole is forecast to shrink 7 per cent in the year to next March, he says. NEC expects it to grow 9 per cent the following year. "But it means we will see fewer DRAM manufacturers to support next-generation applications," Sasaki says. Oki Electric Industry, a leading Japanese communications equipment maker, has already said it is pulling out of advanced businesses linked to memory chips. "The market is now shifting to next-generation applications," he says. For memory chips the next generation means faster operating power and growing memory size. At the same time there are signs of a long-awaited price rise in memory chips. "Input from our customers shows strong demand for January to March, but we need to carefully watch PC suppliers." The company's capital spending will be stepped up to meet the demand, rising from 150 billion yen this year to as much as 180 billion yen next year, Sasaki says. Much of the problem earlier this year lay with the collapse of the South Korean currency, which pulled down the prices of South Korea's large chip makers, he says. On the other hand, the strength of the yen, which soared against the dollar early last month, is also eating into earnings. NEC exports from Japan and has a number of US-dollar contracts. The strong yen is costing the firm 200-300 million yen monthly, Sasaki says. He says NEC has taken a $23.5 million investment, and a 13 per cent stake, in a Californian-based firm, Vadem, which makes portable computing terminals, running Microsoft's compact Windows CE operating system. That could bring it into a direct business tie-up with its rival Sharp, which currently is a key client of Vadem. NEC now supplies the microprocessor for the Vadem terminals, and says Sharp may take over production if the demand is there. "In the future, if Sharp starts its own production, NEC will supply components to Sharp," Sasaki says. "If Sharp feels comfortable with ongoing business, it could expand the relationship with NEC."

To: NBS who wrote (4233)	11/10/1998 4:40:00 PM
From: DJBEINO	Read Replies (1) \| Respond to of 9582

Intel Corp (INTC) 97 9/16 +1 9/16: --Update-- chip giant forecasting stronger than expected Q4 revenues; puts Q4 top-line 8%-10% above Q3 level of $6.7 bln and gross margin up a couple of points from Q3 level of 53%; sees expenses about 8%-10% higher than Q3 level of $1.4 bln; company attributes strength to better than expected demand for PC products; based on First Call survey of analysts, INTC was expected to make $0.95 this qtr, or approx. 7% more than the company earned in the Q3 period; company doesn't report until mid-January.....