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Technology Stocks : Taiwan Semiconductor (NYSE: TSM) -- Ignore unavailable to you. Want to Upgrade?

To: kas1 who wrote (523)	6/5/1999 9:22:00 PM
From: Allen champ	Read Replies (1) \| Respond to of 684

TSMC Takes Stake In Acer Semiconductor (06/04/99, 10:57 a.m. ET) By Sandy Chen, Electronic Buyers' News Preparing for a possible capacity crunch in late 1999 or early2000, Taiwan Semiconductor Manufacturing Co. (TSMC) said it plans to outsource wafers and take a 33 percent stake in a foundry competitor, Acer Semiconductor Manufacturing Inc. (ASMI). Under the plan, Hsinchu, Taiwan-based TSMC will secure about 15,000 wafers per month at ASMI's 8-inch fab beginning in the fourth quarter, the companies said. To accommodate its capacity requirements, TSMC will also ship some new semiconductor-production equipment to ASMI's fab. Terms of the deal were notdisclosed. ASMI, the foundry subsidiary of Taiwan PC powerhouse Acer, manufacturers chips on a foundry basis for two large customers: IBM Microelectronics and Fujitsu, both of which recently licensed their respective sub-micron process technologies to ASMI. Sources said they believe TSMC is securing some capacity from ASMI to make inroads within IBM; however, officials from ASMI, IBM, and TSMC declined to comment on the speculation. Looking to secure even more capacity in the future, TSMC said it also plans to outsource 8-inch wafers from Vanguard International Semiconductor, a Hsinchu-based DRAM maker. This deal did not surprise analysts: TSMC owns a large stake in Vanguard, which still has some relatively high-end capacity. "We are upgrading our equipment from 0.5-micron to 0.35-micron in order to accommodate TSMC," said Paul Hsieh, vice president of finance at Vanguard. "TSMC will outsource a significant amount of wafers from us. The fastest delivery date for the foundry chips will be in the end of 1999." The moves by TSMC are intended to keep up with huge OEM demand, according to Andrew Lu, an analyst of equity research at Credit Suisse First Boston Investment Consulting (Taiwan). "TSMC needs to solve its capacity issue," Lu said. "Right now, TSMC's utilization rate is somewhere between 90 percent to 95 percent." Indeed, TSMC's capacity crunch became apparent when the Taiwan company recently signed a major alliance with Motorola. Under terms of the deal, Motorola said it plans to shift a large chunk of its IC-output to TSMC as well as to other foundries, reportedly including Singapore's Chartered Semiconductor Manufacturing.