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To: Mkilloran who wrote (15501)	2/12/1999 11:05:00 AM
From: unclewest	Respond to of 93625

MO news ICAGO (Feb. 11) - Communications and technology giant Motorola Inc. on Thursday revived a once-postponed project to develop new, larger microchip equipment amid signs the semiconductor market is recovering. Motorola and German technology firm Siemens AG announced plans to make computer chips on 300 millimeter equipment, 50 percent larger than the current standard. The larger equipment yields about 2.5 times more chips per wafer, an operating efficiency which will allow Motorola and Siemens to cut manufacturing costs by about 30 percent. ''Coinciding with the anticipated upturn of the semiconductor market, 300 mm technology plays an essential role for the semiconductor industry and its equipment suppliers,'' Andreas von Zitzewitz, president of Siemens Semiconductors' memory products division, said in a statement. Analysts said the pact with Siemens puts Motorola first in line to develop the 300 mm technology, which Motorola and other firms had delayed after a downturn in the semiconductor industry. In fact, Motorola plans to make the new chips at a $3 billion plant in Virginia, the commissioning of which was delayed last fall due to the semiconductor slump. ''I think 1999 is going to be a mild recovery year for semiconductors,'' said Terry Ragsdale, semiconductor analyst with J.P. Morgan Securities. ''It isn't going to be a blowout year, but it is going to be a lot better than the last three have been.'' Bill Walker, director of Motorola's semiconductor product sector, said Motorola expects semiconductor sales to rise 8 to 10 percent in 1999 after oversupply led to several weak years. But Ragsdale cautioned that the upturn could be short-lived if too many companies begin ramping up production of next-generation chips, just as the market is beginning to recover from oversupply. While the 300 mm technology is still about two years away, Ragsdale said a handful of other firms are likely to start working on competing products in the coming months and years. ''Motorola is going to be at the head of the pack, but they're not going to be alone,'' Ragsdale said. Motorola's stock rose $1.75 to $67.19 on the New York Stock Exchange.