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Technology Stocks : C-Cube -- Ignore unavailable to you. Want to Upgrade?

To: Bob Strickland who wrote (38784)	2/3/1999 12:58:00 PM
From: DiViT	Respond to of 50808

Economist Sees Signs Of Chip Turnaround techweb.com (02/02/99, 6:06 p.m. ET) By Matthew Sheerin, Electronic Buyers' News Citing surprisingly strong global chip sales in the fourth quarter of 1998, a leading industry economist says semiconductor demand could come in line, and possibly outstrip supply, sooner than expected. "It was the strongest quarter in the history of semiconductors," said Jean Philippe Dauvin, corporate economist for STMicroelectronics. During an interview at the NationsBanc Montgomery Securities financial conference in San Francisco Tuesday, Dauvin said he may soon revise his previous forecast for global chip sales in 1999, which currently is at 7 percent. "If I do revise it, it won't be to 7.5 [percent], but probably much higher." Pointing to strong expected demand in the PC sector and in the embedded-controller market due to year 2000 concerns, Dauvin said the supply-demand imbalance that has plagued component suppliers in the past three years could end in the second half of the year. Dauvin is reluctant to revise the forecast just yet, however. "January and February will tell whether this is a clear [upward] trend" or just seasonal, Dauvin said. The economist is also concerned about continued problems in Japan, where semiconductor sales fell 20 percent last year and 40 percent over the past four years, he said. "Japan represents a quarter of the [global] business." Dauvin predicted that DRAM prices, which have stabilized in recent months "could take another dip" in coming months due to competition in that market, despite production cutbacks. Semiconductor ASPs overall, he said, are slipping at appropriate rates. ST itself hopes to make use of two new fabs -- which are currently idle -- by year's end, said Francois Guibert, group vice president, business planning and development for the European company. The facilities, in Italy and France, will be equipped to produce chips at line widths of 0.25- and 0.18-micron. "We will equip it quickly as soon as the market rebounds, hopefully by the end of '99," he said.