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

To: Duker who wrote (30090)	5/12/1999 12:00:00 PM
From: Proud_Infidel	Respond to of 70976

STMicroelectronics to increase fab spending, restart Singapore fab project A service of Semiconductor Business News, CMP Media Inc. Story posted 9 a.m. EST/6 a.m., PST, 5/12/99 By J. Robert Lineback PHOENIX -- With confidence growing in the current chip recovery, STMicroelectronics plans to increase capital spending on semiconductor production to more than $1.2 billion this year after trimming expenditures in 1998 and 1997, said company president and CEO Pasquale Pistorio during a briefing with trade-press editors here. The European chip maker is gearing up to install 8-inch wafer-processing equipment in finished plant buildings in Agrate, Italy, and Rousset, France, according to Pistorio. These two facilities are expected to install new production lines by the fourth quarter and begin operations early in 2000. Construction on a new 8-inch wafer fab is also expected to resume in Singapore, with chip-processing slated to begin in 2001 or 2002, Pistorio said. "We believe the market is now out of the long downturn cycle, and this year, we should exceed our peak in capital spending, which was about $1.2 billion in 1996," he told a small group of editors Tuesday night. STMicro trimmed its capital expenditures to about $1 billion in 1997 and $950 million in 1998 as the semiconductor industry struggled with one of its worst recessions in more than 15 years. STMicro managers are now expecting chip markets to grow 15% in 1999 after worldwide sales fell by about 9% in 1998, following two sluggish years in 1997 and 1996. "We are seeing strong growth signs and it looks like next year we could expect overall growth closer to around 20%," Pistorio predicted. In Agrate, near Milan, the company plans to equip a new facility to begin production of advanced nonvolatile memories and complex ICs with embedded functions. In Rousset, located in the south of France, the new wafer fab will be equipped to produce logic and BiCMOS ICs. Both will start out with 0.25-micron processes and quickly move to 0.18-micron technologies, according to Pistorio. In Singapore, STMicro had decided to delay a new fab when the market slump began a couple of years ago, but now it is planning to restart construction of that facility for production in two or three years, said the company's CEO. The company is also planning to move its new 0.18-micron (drawn) feature size process into its development pilot line in Crolles, France, during the third quarter, as it prepares to shrink devices in a range of products. In particular, STMicro intends to become extremely aggressive in shrinking the size of flash memory cells with a next-generation technology, Pistorio hinted. "We expect to be the first to make flash memories with 0.18-micron processes," he said. That may be important because the flash memories market--like the DRAM business--has suffered in the past year from pricing competition. STMicro has set its targets to move up in the ranking of flash memory suppliers, from around sixth place at the end of 1998 to No. 3 in 1999. In the year 2000, Pistorio would like to see his company become No. 2 in flash, passing Advanced Micro Devices Inc. "Our objective is to become No.1 in flash, but it will take time to pass Intel," he added. STMicro managers believe Intel will eventually pull back in flash as the company grows tired of competing in a more price sensitive, commodity chip market.