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22-Jan-98

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  • UMC's Brooks Warns Of Chip Industry Oversupply
  • January 22, 1998 (TAIPEI) -- Prospects for the semiconductor industry in 1998 look dimmer than those of 1997 due to an oversupply and the financial crisis in Southeast Asia, warned Donald Brooks, chief executive officer of United Microelectronics Corp.'s (UMC's) International Operations department.

    Brooks made these remarks in a recent seminar on semiconductor technology held by UMC in San Francisco, CA. This was the second seminar of its kind held by the Taiwan semiconductor heavyweight since its transformation into a wafer foundry maker.

    Brooks pointed out that wafer foundries have seen their share of the world's overall semiconductor output increasing each year. In 1997, such manufacturing accounted for less than 10 percent of all semiconductor output.

    "By the year 2000, however, the figure is expected to climb to 20 percent," said Brooks. "The mushrooming of integrated circuit (IC) design companies was the major cause of the rapid growth of the wafer foundry sector."

    Fabless IC design companies reported an output value of US$6.8 billion in 1996, and the figure is estimated to reach US$22.8 billion by 2001. This marks a 27.4 percent compounded average growth, and the entire semiconductor industry is only expected to see growth of just over 10 percent, according to Brooks.

    Due to this expansion, Brooks warned, the world is likely to see an oversupply in the wafer foundry industry.

    Both UMC and the Taiwan Semiconductor Manufacturing Co., the biggest wafer foundry makers in Taiwan, have been actively expanding production lines. Many companies in Southeast Asia also have vowed to devote themselves to such manufacturing.

    "Despite the fact that many of these companies have yet to take any concrete action, financial jitters in Asia are likely to reduce demand for semiconductor products," said Brooks.

    (Commercial Times, Taiwan)


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    Updated: Wed Jan 21 15:19:46 1998