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Technology Stocks : Lam Research (LRCX, NASDAQ): To the Insiders -- Ignore unavailable to you. Want to Upgrade?

To: Duker who wrote (2841)	5/7/1999 7:05:00 PM
From: Jong Hyun Yoo	Respond to of 5867

Things are looking good in Korea. Samsung is one company that LAM has gotten alot of market share recently. Also look for additional order from Hyundai now that the merger issue has finally settled. SEOUL, South Korea (ChipWire/EBN) -- Moving back to an aggressive spending program, Samsung Electronics Co. Ltd. said it plans to double its capital expenditures this year, scrapping an earlier plan to keep costs down. The memory-chip giant has boosted this year's capital budget to $1.8 billion, from about $900 million last year. News of the spending increase concerned some industry watchers, who noted that DRAM prices are falling again amid a global oversupply of certain devices. They believe that Samsung specifically is battling Micron Technology Inc. for market-share leadership. "These giants are positioning themselves now, no matter how bloody the process, to be market leaders whenever DRAMs turn around," said analyst Bill McClean of IC Insights Inc. in Scottsdale, Ariz. Not so, according to Avo Kanadjian, vice president of memory marketing for Samsung Semiconductor Inc. in San Jose. The spending increase "merely returns Samsung to traditional capital-spending levels of a little over $2 billion annually in the several years before 1998," Kanadjian said. "Because of the Asian financial crisis, last year's sharp reduction in capital spending was abnormal." Samsung's original 1999 budget had appropriated $1 billion for capital spending, and the company upped the ante another 20% in February, before settling on the final number this month. Kanadjian said the increased funds will be used to build Line 9 in Kiheung, South Korea, as well as to upgrade other existing fab lines. Line 9 will start production late in the third quarter with a capacity of 16,000 eight-inch wafers per month, using 0.18-micron processing, according to Gurinder Kalra, an analyst with Morgan Stanley Dean Witter in Hong Kong. A major share of the expenditures, he said, will go for production of next-generation devices, particularly 128- and 256-megabit chips and Direct Rambus DRAMs. "We aren't adding capacity just in mainstream DRAMs, which are already in oversupply," Kanadjian said. Samsung has already expanded its fab in Austin, Tex. When the facility is operating at full strength in several months, its total capacity will double to 25,000 wafer starts per month, according to a spokesman for the fab. Morgan Stanley estimates that Samsung will produce 260 million 64-Mbit DRAMs and 45 million 128-Mbit devices in 1999. Only Micron and the merged Hyundai-LG Semicon company will be in the same DRAM league, said Mark Edelstone, an analyst at Morgan Stanley in San Francisco. "These three firms will control 75% of the global DRAM market by the end of the year, changing the entire shape of the market," he said. The recent price drop for 64-Mbit SDRAMs hasn't affected Samsung as much as it has some competitors, Kanadjian said, adding that his company is still strong in older DRAM types, such as EDO and 16-Mbit chips, which are enjoying price gains.