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Technology Stocks : ATI Technologies in 1997 (T.ATY) -- Ignore unavailable to you. Want to Upgrade?

To: Marc who wrote (3430)	5/21/1999 9:54:00 AM
From: Marc	Read Replies (2) \| Respond to of 5927

TSMC Plans 12-Inch Wafer Plant to Rival With Intel (Update1) TSMC Plans 12-Inch Wafer Plant to Rival With Intel (Update1) (Adds comment from fund manager and analyst from the third graph; adds more details and closing prices.) San Jose, California, May 21 (Bloomberg) -- Taiwan Semiconductor Manufacturing Co. said it will spend as much as NT$70 billion ($2.1 billion) to build one of the world's most advanced wafer plants, boosting its ability to compete with Intel Corp. and Siemens AG. TSMC and its unit Vanguard International Semiconductor Corp. plan to build a 12-inch wafer factory in Taiwan as early as next year, Tseng Fan-chen, TSMC's president, said in San Jose, California. Once the factory opens, TSMC will be able to use the latest 0.13 micron production technology, which allows for three times as much output as the mainstay 0.25 micron technology. Intel, the world's largest chipmaker, and Siemens also have plans to build the kind of 12-inch wafer plants that would allow them to adopt the new technology, which has yet to enter commercial use. ''The project will significantly raise TSMC's exposure worldwide,'' said George Lee, who manages NT$3.6 billion for Fubon Securities Investment Co. ''It's a big plus for the company's earnings momentum'' in the coming years. At stake is the $5.4 billion global business for custom-made chips. TSMC, the world's largest maker of chips to order with more than 40 percent of the world's market, expects to benefit from a surge in global sales to $39.4 billion by 2008 from $5.4 billion last year. 'Solid Returns' TSMC said its new plant should reach mass-production levels in 2002, at a time when analysts expect demand to be strong. ''We are bullish on the semiconductor sector and see an expansion cycle over the next two to three years,'' said Boris Petersik, a technology analyst with Donaldson, Lufkin in Hong Kong. ''Since at most 10 firms can afford this kind of investment and expect to make money, the competition should be not too fierce and I expect this to offer solid returns to TSMC.'' TSMC yesterday raised its capital spending forecast for this year to a record $1.13 billion from $830 million earlier. The company's clients include Royal Philips Electronics NV, Motorola Inc., Fujitsu Ltd. and ATI Technologies Inc. About three- quarters of TSMC's customers are chip design houses without manufacturing plants, while the rest own their own plants but use TSMC facilities to supplement their production. Last week, TSMC said it started using 0.18 micron technology to make chips that are 30 percent faster and use a third less power than earlier types. Intel has also started using 0.18 technology, though it hasn't introduced the chips yet. One micron is 1/100th the width of a human hair, and the term is a gauge of how finely the circuits are etched into a chip. TSMC's factory announcement powered gains for its shares and those of other chipmakers. TSMC surged 3.6 percent to NT$114.5 and rival United Microelectronics Corp. gained 0.9 percent to NT$56. They were the most actively traded shares by value.