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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Gottfried who wrote (26710)	11/25/1998 9:52:00 AM
From: blake_paterson	Read Replies (1) \| Respond to of 70976

Don't know if this was posted yesterday, if so, please disregard: mercurycenter.com Posted at 6:58 a.m. PST Tuesday, November 24, 1998 Taiwan Semicon cautious on recovery TAIPEI, Nov 24 (Reuters) - Made-to-order microchip leader Taiwan Semiconductor Manufacturing Co said it had seen modest signs of revival in the slumping semiconductor industry, but not enough to ease its cautious stance. ''Visibility is still not that good,'' said Rick Tsai, executive vice president of operations, peering into the future. Taiwan Semicon, the world's leading manufacturer of made-to-order ''foundry'' or logic microchips, had hit its bottom in May-June and now was slowly pulling out of the global slump, Tsai told Reuters in an interview late on Monday. But judging the rate of recovery -- if it really had begun -- could be tricky, Tsai said. Orders are typically placed at short-term intervals, leaving Taiwan Semicon with little ability to chart its production outlook beyond just a few months, he said. ''The visibility that companies typically give us is only two to three months,'' Tsai said in his office at the northern Hsinchu Science Park -- Taiwan's Silicon Valley. What's more, Tsai said, orders from customer to customer remained uneven, making it even harder to get an overall picture of demand. While Taiwan Semicon did see orders picking up late in the third quarter and early in the fourth, the rebound in demand was neither even nor strong, Tsai said. ''Some customers saw a major pickup while for other companies it was just ho-hum,'' Tsai said. Tsai said Taiwan Semicon would not be confident that a solid recovery is underway until it sees the order levels of 90 percent of its customers rebound. Taiwan Semiconductor makes special purpose logic chips that form the electronic innards of a dizzying variety of electronic products, working from customers' own microchip designs or assisting in the design process. Struggling to cope with overcapacity and sluggish global demand, semiconductor makers worldwide have suffered in 1998. In the third quarter, Taiwan Semicon surprised some analysts by reporting only T$2.1 billion (US$65 million) in net profits on sales of T$11.3 billion, a 54 percent drop in profits compared with the third quarter of 1997. For all of 1997, Taiwan Semicon reported net profits of T$17.96 billion on sales of T$43.94 billion. Industry leaders say the global slump is bottoming out. The Semiconductor Industry Association, based in California's Silicon Valley, has said microchip sales worldwide were on track to fall 10.9 percent in calendar 1998. This is the first year since 1985 that the entire industry, as opposed to specific product markets, has shrunk. The tables should turn in 1999, with the association forecasting a 9.1 percent rise in worldwide sales followed by a further 15.2 percent rise in 2000. Tsai said he agreed that an industry-wide recovery was likely next year, but was more cautious about its magnitude, forecasting growth of between five and 10 percent unless the huge U.S. and European markets hit unforeseen problems. ''I think 1999's growth will come mostly in the second quarter. Such a growth pattern seems to be panning out -- barring any major recession in the U.S. or Europe,'' Tsai said. (US$1-T$32.4)