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To: Norrin Radd who wrote (4251)	11/14/1998 12:33:00 PM
From: DJBEINO	Read Replies (1) \| Respond to of 9582

Taiwan's DRAM makers turn tables on Micron By Jack Robertson Electronic Buyers' News (11/13/98, 04:00:50 PM EDT) Washington Faced with a dumping petition that threatens their competitiveness in U.S. markets, Taiwan's DRAM makers struck back earlier this week by charging plaintiff Micron Technology Inc. with largely contributing to the industry's oversupply. In a fact-finding hearing before the International Trade Commission here, representatives of a Taiwan chip industry consortium maintained that because Taiwan's limited market presence has done nothing to inflame global overcapacity, a duty assessment would do little to ease the industry's glutted DRAM reserves Rather, they said, Boise, Idaho-based Micron has been a major contributor to over-production through a relentless, and ongoing, series of DRAM die shrinks that are yielding an ever-increasing number of chips from the company's fabs. John Reilly, an economic consultant representing the Taiwan-based DRAM makers, testified that Micron's die shrinks have added far more DRAM chips to the already-saturated market than have any of Taiwan's fabs. “When Micron completes its process-technology transfer to the Texas Instruments fabs they acquired, this will have a significant impact on global DRAM capacity,” Reilly told the ITC. Bonnie Byers, an economic specialist retained by Micron, countered with evidence that at least 13 Taiwanese suppliers-a number equal to all the DRAM makers remaining worldwide-have built large fabs during the past two years as part of a global master plan. However, Taiwan Semiconductor Industry Association president Glenda Wu said the island's companies are even now in the process of scaling back production. Major memory companies, including Acer, Mosel-Vitelic, Nan Ya, PowerChip Semiconductor, and Vanguard, are cutting DRAM expansion and shifting production to other goods. In any event, Wu said, Taiwan has such a small share of total DRAM sales that it “cannot make any impact on the global market. Assigning dumping duties on Taiwan manufacturers isn't going to solve the big oversupply of DRAMs.” Ken Hurley, vice president and general manager of Nan Ya Technology Corp. USA, told the ITC that his company doesn't even compete in the same DRAM sector as Micron. Nan Ya's highest-density DRAM chips are 16-Mbit, devices that Micron is phasing out of production. “We make legacy DRAMs for legacy applications,” Hurley said. “We compete with Korean and Japanese DRAM producers for these products, not Micron.” Moreover, Hurley said, not a single Taiwanese DRAM maker selling on the merchant market had been qualified to sell to OEM customers on a contract basis. Rather, he said, his company and other Taiwan-based merchant suppliers sell their products only to the spot market, where he claimed Micron is reducing its presence. Advocates for the island's chip companies also questioned how Micron, which they said holds 50% of the U.S. market, could possibly be injured by imports from Taiwan. “Micron is now positioned as the world's largest DRAM producer,” Reilly said. “Intel Corp.'s $500 million investment in Micron reflects a big confidence that Micron doesn't face any large injury.” Reilly added that recent, sustained DRAM price increases-ranging from 14% for 64-Mbit chips to as much as 60% for some 16-Mbit devices-do not bear out Micron's assertion that U.S. suppliers are being hurt by foreign competitors. “Micron, however, doesn't include this favorable pricing data in their complaint, which stops listing prices in July of this year,” he said. In its allegations, Micron had cited a decision by Mitsubishi Electric Corp. to close a DRAM fab in Durham, N.C., as evidence that underpriced Taiwanese DRAM was forcing companies out of business. But Kevin O'Brien, an attorney for Mitsubishi, told the ITC the Durham fab was an aging 4-Mbit facility that was no longer cost-effective, and was part of a much larger reorganization of Mitsubishi's operations throughout the United States. ebnews.com

To: Norrin Radd who wrote (4251)	11/14/1998 1:06:00 PM
From: DJBEINO	Read Replies (1) \| Respond to of 9582

ITC DISCUSSES DUMPING CHARGES AGAINST TAIWAN -------------------------------------------------------------------------------- Washington, Nov. 13 (CNA) The US federal International Trade Commission (ITC) held a conference on Friday to discuss dumping allegations leveled against several Taiwan companies. Although the six ITC members were not present at the conference, their assistants questioned Micron Technology of the United States, which filed the dumping charges against Taiwan in October. They also questioned the representatives of the Taiwan companies, and the results will be written up in report form for the ITC to make an initial ruling on Dec. 7. It is understood that one of six members of the commission might abstain from voting, and the US lawyer representing Taiwan said that this means the Taiwan side will need at least three votes to win in the initial ruling on whether Taiwan's products have damaged US industry. Hu Cheng-tah, secretary-general of the Taiwan Semiconductor Industrial Association, said Taiwan performed well at the conference and presented a strong defense. Nevertheless, he predicted that "Taiwan will lose the initial ruling." The lawyer said that Taiwan has stressed the different technology level of its products, adding that the major products of Micron Tech are 64MB dynamic random access memory (DRAM) chips, while Taiwan's products are 16MB DRAMs, which do not compete with the American products. Taiwan's DRAMs are also alternative products. Japan's Mitsubishi, which has a strategic alliance with a Taiwan semiconductor company, also spoke for Taiwan, stressing that Japanese companies can easily transfer orders from Taiwan to South Korea and Singapore, and that it is groundless for Micron Tech to claim that Taiwan's lower prices have damaged or threatened its operations. The lawyer representing Taiwan said that Steve Appleton, CEO of Micron Tech, earlier this week painted a rosy picture of the world semiconductor industry, saying that although the DRAM market declined by 34.8 percent this year, it is expected to rebound by 25 percent next year, and 28 percent in 2000. However, Micron Tech denied at the meeting that the global DRAM market will rebound, saying that such predictions have been repeated several times, and do not mean that Micron Tech will not be damaged by Taiwan dumping. The lawyer representing Micron Tech said that they were not surprised by Taiwan inviting a Mitsubishi representative to the conference, pointing out that Taiwan invited Motorola to speak for the island in a discussion about SRAM dumping earlier this year, and still lost the case. But Taiwan's lawyer said that the initial ruling does not represent the key battlefield. The first ruling only determines whether or not the case will continue to be investigated, he said, and the key will be the final ruling next summer. The lawyer expressed confidence in Taiwan's ability to win the final victory

To: Norrin Radd who wrote (4251)	11/16/1998 1:54:00 PM
From: DJBEINO	Read Replies (1) \| Respond to of 9582

16M DRAM Exodus Sparks Price Surge From Page One of Electronic News: November 16, 1998 Issue San Jose--The stampede of dynamic RAM manufacturers out of the 16-megabit market has created dramatic price hikes and shortages in that density. Spot prices in some cases have doubled in a matter of weeks, and contract prices are starting to follow suit. The situation is forcing some OEMs to accelerate their plans to redesign their systems to accommodate 64-megabit parts, and at least one major DRAM supplier is slowing its phase-out of 16M memories to meet demand. While pricing has also risen in 64M devices, the situation there is more subdued because chip manufacturers haven't scaled back production to the same degree as with 16M parts, which memory suppliers have virtually abandoned because of rock-bottom pricing. "A couple of months ago, prices were about $1.50 each, so people decided not to make 16-megabit devices. Nobody could make a profit," said Jeff Mailloux, DRAM marketing manager at Micron Technology. "I have seen prices as high as $3 or $4 recently because of the production cutbacks. "We are making a limited number of parts but also phasing out 16-megabit products. That is happening sooner than some predicted and that's why that (dramatic spot price increase) is happening. "People are having a hard time getting the 16-megabit now. A lot of capacity has been brought off-line" noted Bruce Walicek, an analyst with BT Alex Brown. "There is still a lot of 16-megabit usage out there. They are using it in networking systems, for example." 16M DRAMs are today also designed into trailing-edge PCs that still use SIMMs (single in-line modules. "An issue causing concern among customers is lack of 5-volt parts. This is causing them to redesign systems," to use 3-volt memories, Mr. Mailloux said. A number of foundries are willing to make 16-megabit EDO on a contract basis, he added. Mr. Mailloux said he is also seeing a rise in 64M prices but not at the same dramatic level as 16M memories. Most of the increase has been in spot prices. 64M memories have been hovering around $9.50 and $10.50 and the consensus is they will settle around $10. Demand for 16M DRAMs continues to exist in the telecommunications sector, said Bart Ladd, senior product marketing manager for NEC's Memory division. "We also see demand for 16-megabit in the aftermarket where they are trying to build 8-megabit by 32s in EDO, or fast page for that matter, for existing systems. Some Pentiums still use 8-meg by 32," he noted, adding, "There is still demand to put memory upgrades in those old 486 systems. "We are definitely seeing a shortage in 16-megabit fast page EDO and 64-meg PC 100 and 64-EDO devices. It's a very strong demand this time of year. It's related to year end PC sales but also people have had a tougher time ramping up 64-meg PC 100 than they had anticipated. Another possible reason on 16-meg EDO is Micron filing their accusations of dumping against Taiwanese suppliers. This may have raised some concerns about availability," Mr. Ladd said. Like Micron's Mr. Mailloux, Mr. Ladd is also seeing a related rise in 16M contract DRAM prices . "Yes we are, but not to the degree as in spot aftermarket. But the contract market is moving up." Mr. Ladd said NEC will continue to shift its production to 64M DRAMs but does not plan to discontinue 16M devices altogether. "We have cut back on production on 16-meg. I don't believe we've shut anything down. We will continue to make 16-meg synchronous DRAMs, but in terms of EDOs we are phasing that down on a customer by customer basis." Spot prices of 16M DRAMs are around $3.50, said Avo Kanadjian, vice president of memory marketing for Samsung Semiconductor. In response to the emerging shortages, Samsung is slowing its phaseout of those parts, he added. Non-PC applications including workstations, servers, and some consumer and communications products continue to use 16-megabit parts, said Steve Cullen, senior analyst with Cahners In-Stat Group, Scottsdale Ariz.. "These products tend to have a longer product life, and it takes them longer to convert. There is still a need for EDO and fast page DRAM rather than SDRAM." Despite the shift toward 64-megabit, the 16-megabit still represented 62 percent of DRAM units shipped in the third quarter, or 548 million units. In pricing, they represented 32 percent of the $1.05 billion DRAM market during that period. The peak month for shipping 16-megabit parts was in March, when 224 million units sold. In September, that number was down to 177 million units, Mr. Cullen said. There is still some doubt in the industry that the 3-year price swoon is truly over, particularly for 64-megabit memories. "Many of the DRAM manufacturers I spoke to in the Far East are very skeptical that any increases can really stick," said Drew Peck, an analyst with Cowen & Co. "Overall production levels are still very high, and the impact of lower capital investment won't really be felt in the DRAM business until probably 2000." Concern also exists that rising prices are prompting chip manufacturers, in Korea particularly, to increase output of 64-megabit parts, which would hurt prices once again. One analyst speculated that memory makers were hiking prices on 16-megabit parts to speed the transition to 64-megabit. "Anytime a leader wants to get out of the low density DRAM market, they raise the price," said Jim Handy, principal analyst with Dataquest.