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  • U.S., Japan Firms Raise OEM Orders to Taiwan Wafer Makers
  • March 9, 1998 (TAIPEI) -- Although Taiwan OEM wafer companies experienced a slump in the first quarter of 1997, they began to see a turnaround in the second quarter, buoyed by a rise in OEM orders from the United States and Japan.
    Sales in the second half of the year were nearly 200 percent higher than in the first. Industry sources said 1998 is likely to see a similar situation, and that the buoyancy in the second half of 1998 will even surpass that of the same period in 1997.

    Over the past few years, U.S. companies have been gradually reducing the proportion of wafers manufactured in-house and contracting out more wafer production to OEM manufacturers.

    More recently, Japanese and Korean companies have been following in their steps, with the result that orders to local wafer makers are increasing.

    An executive from United Microelectronics Corp. said his company has been in contact with several Japanese giants regarding cooperation possibilities.

    An executive from Taiwan Semiconductor Manufacturing Co., Ltd. said that with the exception of Hitachi Ltd., all Japanese firms in the industry have begun contracting out their wafer manufacturing.

    Toshiba Corp., for instance, has placed OEM orders with Taiwan's Winbond Electronics Corp. and Charter Electronics Industrial Pte., Ltd. of Singapore.

    Matsushita Electric Industrial Co., Ltd. subcontracted production to Taiwan's Macronix International Co., Ltd., NEC Corp. to a Chinese producer and Fujitsu Ltd. to TSMC.

    The TSMC executive added that in 1997, his company posted operating revenues and profits of NT$43.9 billion (US$1.36 billion) and NT$17.9 billion, respectively, translating into a profit rate of 40.9 percent.

    The profit rate for the fourth quarter alone was even higher, 44.1 percent.

    He said he would not speculate on whether this year's performance will be better than last year's, but added that the market for OEM wafer manufacturing already shows signs of heating up.

    (Commercial Times, Taiwan) br>

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    Updated: Sun Mar 8 00:42:37 1998