___________________________________
***NeoMagic Gets HP Win
(October 22)
Newsbytes reports that Hewlett-Packard is shipping the OmniBook 4150 that includes NeoMagic's AV 256-bit multimedia accelerator. The 4150 includes a 14.1-inch XGA TFT display.
***Motorola and Aureal Announce Strategic Alliance (October 20)
The Motorola Internet and Networking Group (ING) and Aureal Semiconductor announced a strategic alliance to develop and market a series of communication which combine Motorola's Soft Modem technology with Aureal's Vorte 3D audio accelerators and A3D positional audio algorithms.
The product to be announced is an Aureal modem/audio combo card that integrates Aureal's Vortex audio chip with Motorola's SM 56 modem software. This combines a V.90 data/fax/voice modem (with auto-fallback to K56flex for backward compatibility) with Aureal's A3D positional audio technology and the Vortex 8820 digital PCI audio accelerator.
***Dave and Buster's in New York State Gets Iwerks Ride (October 22)
Iwerks announced that the Palisades Center Attraction, Rockland County, N.Y., is Iwerks' fifth TurboRide Theater at Dave and Buster's. The projects are also at
Ontario, Calif.;
Irvine, Calif.;
Bethesda, Md.; and
Philadelphia.The next TurboRide 3D! is scheduled to open later this year at the Dave and Busters in Orange, Calif.
At the WAVE Report we continue to be impressed by the ability of Dave and Buster's to execute. They are redefining out-of-home entertainment. What was the coin-op arcade has been transformed into a family and adult entertainment complex with diversity of play. They included the old but in a setting which is socially centric. Further, they know their demographics very well and cater to it. With DisneyQuest we are seeing the emergence of a new and different model of out-of-home entertainment. It is based on a concept where the guest defines the experience. This is really an interactive theater. When both concepts are evaluated against the traditional coin-op equipment and its usage in an arcade it is not hard to understand why the industry is being transformed by new concepts, new venues and quality experiences.
***RealiMation Announces Software Evalutation Program (October 23)
The "Evaluator Program".has a 30 trial period for potential developers seeking to evaluate the RealiMation toolkit. Included are RealiStorm plug-ins, the STE scene creation tool and the API with direct access to full technical support, where required.
***Kaidan Rolls with Large Turntable for Imaging (October 29)
Kaidan announced their largest immersive imaging product for single row object photography called the Meridian Turntable (MT-84). The MT-84 is a computer-controlled motorized turntable that has a diameter of 84 inches (7 feet) and can support objects up to 1000 pounds.
Kaidan has also announced their second software application:
MacDCS. This software remotely triggers and downloads images from the Kodak line of DCS professional digital cameras to the Macintosh.
The complete line-up of DCS cameras can be seen at the following webpage:
http://www.kodak.com/global/en/professional/products/cameras/rang
e.shtml
The MT-84 is controlled with Kaidanšs eMCee software and with third-party applications such as Applešs QuickTime VR Authoring Studio, Roundabout Logicšs Widgetizer and VRToolBox VR ObjectWorx. With the MT-84, developers can affordably create immersive object movies of large and heavy objects. It is suited for creating object movies of fashion models, motorcycles, furniture, appliances, aerospace components and industrial goods.The MT-84 is driven by a stepper motor and controller. Like other Kaidan motorized turntables and object rigs, the MT-84 relies on Kaidan's eMCee control software. eMCee provides a simple interface to enter the various control parameters, such as angular movement, number of increments, turntable speed and delays, and camera interface. eMCee is customizable and can be tailored to meet specific requirements.
The Macintosh version also supports AppleEvents (direct QuickTime VR Authoring Studio connection) and is AppleScriptable, providing comprehensive and flexible control. The Windows version is currently under development and will be available Q1-1999.
In addition to the eMCee software, the price of the MT-84 also includes the customer's choice of Apple's QuickTime VR Authoring Studio or Live Picture's Reality Studio.
Designed to be easily assembled and disassembled, the MT-84 breaks down into separate quadrant assemblies, a central rotating post unit, perimeter safety shield, and various cables and accessories. The few tools that are required to assemble the unit are included. The MT-84 can be shipped in standard packaging, or the optional MT-84 Transport Case. This case provides an enclosure that will support continued transport to and from the shoot location.
MT-84 Specifications:
-Computer-controlled motorized turntable.
-Capacity 7 ft diameter, 1000 pounds maximum weight.
-Modular: Breaks down into 4 quadrants for shipping and transport.
-Comes with Kaidan eMCee control software.
-Choice of Apple QTVR Authoring Studio or Live Picture Reality
Studio included with MT-84!
-Sub-degree positional accuracy.
-Extensible Heavy-duty motor controller, dual-axis for future capabilities.
-Guaranteed 30-day money back guarantee, one-year limited warranty.
-Options: Transport case,SRP $19,999.95. Kaidan has bundle offers that combine panoramic tripod heads with Immersive Imaging software. For a limited time, the following bundle is available:
Kaidan QuickPan Magnum QPX-2 Panoramic Tripod Head and Live Picture Reality Studio Bundle for $599.95.
***Dell Hits $6m per Day and Rising on Internet Sales (October 23)
Reuters reports that Dell Computer Corp. chairman Michael Dell said that the company's sales on the Internet continue to rise from the average $6 million a day posted in the company's fiscal second quarter. Dell, speaking to executives here, said the company's Internet sales grew from about $1 million a day in March 1997 to $4 million a day in March 1998. Just months later, Internet sales had grown to $6 million a day. "And that number still keeps rising," Dell said, adding that Internet sales are also increasing as a percentage of revenues. While electronic commerce is important, Dell said the Internet has fundamentally changed the way the direct marketer of computers does business. For example, he said 20 percent of all visits to the company's Web site were for service and support.
In a media briefing following a recent speech, Dell declined to comment on analysts' earnings estimates but said business at the company he founded "continues to be very good." He said the Asian economic turmoil has worked in Dell Computer's favor in some aspects. The economic crisis has caused prices of computer components produced there to tumble, for example, and Dell said those prices continue to fall at a fast rate. "Because Dell has only eight days' inventory, we're able to capture that savings and pass it on to our customers faster than any other company," Dell said.
For Dell's fisal 1998 ended Feb. 1, just 7 percent of revenues were from the Asia-Pacific region and Japan. But Dell said the company's growth there has been well ahead of the computer industry. Talk of gloom and a possible U.S. recession also did not shake Dell, who serves as chief executive of the company as well. "Certainly we look at what's going on in the financial markets and you have to undertake some caution and think about how this is going to impact buying patterns," Dell said. "One of the things that we observed is that when companies go into a mode of looking to reduce costs, we actually get invited to bid more often," he said. "I'm not convinced that just because the economy slows down we won't have more opportunities to grow and expand, if we're able to execute."
Dell's success is not just about good web pages for selecting and purchasing computers. It is about the business model of the company. We have had personal experience in buying Dell computers from the web and the process and buying experience is superb. At Dell selling computers is its core competency. This is backed up by the ability to execute in assembling and delivering computers. We have also did a comparative purchase evaluation of IBM and Compaq and they just did not get it. Dell is transforming the retail business model of computing in much the same way that the <$1,000 PC is for the low end of the industry. It is interesting that Dell has largely avoided this segment of the market.
***NVIDIA Gets Micron Design Win
(October 23)
NVIDIA announced that Micron Electronics has chosen NVIDIA's RIVA TNT 3D graphics processor for their Millenia Max desktop systems. It will be available as an option through the Viper V550 from Diamond Multimedia Systems.
***Coin-Op Tanks at Midway
(October 23)
Multimedia Wire Reports that in spite of Midway Home Entertainment's revenues climbing more than 70% year- on-year for Q1 as parent company Midway Games reported a 40% decline in coin-op revenues that "clearly disappointed" the company, CEO Neil Nicastro told analysts. Midway posted Q1 net income of $9.8m, or 26 cents/share, on revenues of $89.3m. That compares to net income of $7.2m, or 19 cents/share, on revenues of $73.7m. Home video game revenues climbed to $69.7m from $40.1m in the same quarter last year. Coin-op revenues fell to $19.6m from $33.7m.
Midway provides one of the few views into the competitive dynamics between home and out-of-home entertainment markets. Coin-Op is losing. This is not the first time that coin-op has declined at Midway, it did from FY 1997 to FY 1998, for example. With the latest generation of home video consoles there is every indication that a toll is being taken in coin-op quarter drop. This is reflected in the purchase of new coin-op games by operators and the results seen in Midway's income.
***STMicroelectronics Announces One-Chip Back-End Decoder for DVD Players (October 6)
STMicroelectronics announced that it is sampling a chip that does all DVD back-end decoding and host processing functions. This back-end chip, the central microprocessor in DVD players, will be available for less than $30, between 30 and 50 percent below the price of previous generation chipsets. Samples of the new device, the STi5505, are available today, and production volumes are planned for the fourth quarter of 1998.
Worldwide sales of DVD players are expected to reach 6 million units in 1999 and 10 million units in 2000, up from 3 million in 1998. Market research also indicates that worldwide penetration of DVD players in households will ramp up quickly to almost 6% over a five-year period. This rate of adoption by consumers is similar to that achieved following the introduction of audio CD players.
DVDs will have a 32-bit ST20 RISC processor embedded into a single chip set. This advanced architecture guarantees an ultra-rapid user interface, ensures fast execution of modes such as fast-forward and reverse, and allows OSD updates that are up to ten times faster than those possible with a standard MPEG-2 decoder with an external host processor. The STi5505 provides full high-quality playback support of DVD-Video, Video-CD, CD- Digital Audio and DIVX standards.
The major blocks contained in the STi5505 are a 32-bit ST20 RISC processor which controls the internal decoders and acts as a host and navigation processor, a hardwired MPEG-2 ML@MP video decoder, an audio decoder that supports all DVD audio standards (LPCM, Dolby Digital 5.1 channel, MPEG multichannel, DTS and 3D Surround) and a PAL/NTSC digital encoder with Macrovision 7.01 and video DAC.Other key DVD features supported include DVD, VCD and CD-DA hardware sector filtering, internal or external track buffering management, letter-box display formatting and DVD "CSS" decryption, as well as hardware sub-picture decoding, overlaying and mixing. The built-in graphics capabilities include an 8-bit On-Screen Display and 16 levels of video/graphics blending.
Containing all of the peripheral circuits required in DVD applications, the STi5505 also integrates full DVB demux and descrambling functions, allowing the design of highly cost effective DVD/ Set Top Box combo systems. The STi5505 is fabricated in a proven 0.35 micron CMOS technology and housed in a 208-pin PQFP package.
A STi5505 DVD development platform is available; this supports both rapid time- to-market and flexible product differentiation. The platform includes a DVD reference board and a complete software package including DVD application, navigation and drivers. Product differentiation is achieved by modular software that allows flexible customization and includes full API sets.
***Broadcom Announces 9-Port Fast Ethernet Switch-on-a-Chip (October 12)
Broadcom Corporation announced an integrated 10/100BASE-T, 9-port scalable switch, which integrates the media access controller (MAC), switching fabric, eight 10/100 transceivers and one MII port into a single chip. The Broadcom BCM5308 switch integrated circuit should quickly establish lower price levels for Fast Ethernet switches. The bill of materials for an 8-port 10/100BASE-T switch based on the BCM5308 is reduced to approximately $14 per port.
Targeted at the competitive LAN switch market, the BCM5308 reduces the design complexities and time-to-market barriers typically associated with switch development. The BCM5308 is a complete plug and play switching solution, which is fully configured upon power up, eliminating the need for an external CPU or EEPROM. The BCM5308 combines all of the functions of a full wire-speed non- blocking Fast Ethernet switch into a single-chip solution. Networking equipment designers need only add external low-cost SSRAM to build a complete switching system supporting up to 32 ports (16 ports non-blocking). Broadcoms modular and flexible architecture enables system vendors to develop a family of products targeted at a wide variety of port densities and price/performance points - in most cases using the same PCB design.
The BCM5308 for the small office/home office (SOHO) and entry-level corporate markets where cost, ease-of-use and flexibility are important. An integrated address management engine allows the BCM5308 to configure to any network topology. This capability eliminates the end user from having to configure the network, making it easy and cost effective to install additional network connections. The BCM5308s address management engine provides Layer 2 MAC address lookup and learning functions at full line-speed frame rates. On-chip LED drivers provide per port and global LED status indicators, offering the end user helpful information about the status of the switch. This on-chip function eliminates the need for external interface logic.
Fully compliant with the IEEE 802.3, 802.3u, and 802.3x specifications, the device integrates eight 10BASE-T/100BASE-TX transceivers, nine MACs, a non- blocking switch controller and the address management engine into a 3.3 Volt, monolithic CMOS device. The transceivers perform all the physical layer interface functions for 10BASE-T Ethernet on Category 3, 4 and 5 unshielded twisted pair (UTP) cable and 100BASE-TX Fast Ethernet on Category 5 UTP cable. The address management engine supports up to 16K Unicast MAC addresses, which is more than sufficient for edge switch applications. The MACs support half- and full-duplex flow control, enabling the chip to manage network congestion. The switch fabric supports full wire-speed, full-duplex 100Mbps traffic on every port simultaneously and enables non-blocking performance on up to 16 ports. A 2 Gigabit-per-second expansion bus allows designers to cascade up to four BCM5308s or 32 ports per system in a daisy-chain configuration. An interface to low-cost commodity SSRAM further reduces the overall system cost and provides high memory bandwidth for non-blocking performance.
The eight ports with integrated transceivers Auto-Negotiate to either 10 or 100 Megabits-per-second and full- or half-duplex mode. Port one can additionally be configured to FX mode. This enables the chip to match the requirements of todays network interface cards (NICs) and attached switches or hubs. The dual- mode ninth port supports an MII mode for an additional UTP port or fiber uplink. It can also be used as a high-speed expansion port for scaling to higher port density configurations. The expansion port provides a glueless interface between multiple BCM5308s using a daisy-chain technique, up to 32 ports.
The 10/100BASE-T/TX transceivers incorporated in the BCM5308 are based on Broadcoms Digi-(PHY) Digital Signal Processing (DSP) architecture, which ensures interoperability and robust performance.
The BCM5308 is available in sample quantities today. It is priced at $64 in 10,000 unit quantities and is packaged in a 352-pin ball grid array (TBGA) package.
***Millennia Systems Announces USB xDSL MODEM (October 8)
Millennia System is developing a USB xDSL CPE modem .The Millennia Systems xDSL modem can be easily installed by simply connecting it to any PC supporting the new standard interface for external peripherals Universal Serial Bus or USB. The modem can support either the UAWG G.Lite ADSL, a standard now being developed for adoption by the ITU later this year, or the full rate ADSL specified by ANSI T1.413. Rates of up to 8 Mb/s downstream and 768 Kb/s upstream can be achieved, although the actual throughput depends on the length and wire gauge of the local phone line. The modem supports either IP or PPP over ATM cells on copper phone lines using standards-based Discrete Multi-Tone (DMT) ADSL transmission.
The product is compact with no external power supply module required. The USB modem control functions are provided through an API in the PC that allows the development of a GUI based User Control Application for features such as selection of quality of service parameters and field upgrades of the modem software.
The USB xDSL modem will offer interoperability with a number of leading Digital Subscriber Line Access Multiplexer (DSLAM) and Digital Loop Carrier (DLC) equipment vendors."
***CardX Standard translates USB & 1394 Serial Interfaces (October 5)
PCMCIA, an international standards body and trade association for the modular peripheral industry announced that the new CardX standard that adapts the popular USB and 1394 serial interfaces into specifications compatible with the PC-Card form factor is currently in the formal development stage. CardX will offer developers of modular peripheral devices, such as laptops, personal digital assistant (PDA) and video cameras, the ability to use the 1394 and USB interfaces in the PC-Card form factor.
The new, high-speed 1394 CardX standard will support applications such as real- time video capture and notebook computer/PDA interfaces to Gigabit Ethernet or other high-speed LAN/WAN networks. The USB CardX specification will support serial-port applications such as modems. PCMCIA is the central body managing the CardX standard; member companies will actively participate in developing the new standard. A formal standard is planned for late 1999 or early 2000.
In related news, PCMCIA announced that it has officially adopted the PCI power management specification into the PC Card standard. The specification was endorsed last November. Today, more than 90 percent of notebook computers include an integrated CardBus controller. The specification brings desktop PCI power management features to the CardBus standard, and is designed to help notebook computer developers extend battery life, reduce heat dissipation and install and support only one driver. The specification is available as the 6.1 update to Release 6.0 of the PC Card standard.
CardBus is a high-performance, 32-bit PC Card interface that provides 100Mbps LAN, SCSI II, video conferencing and other high-performance interface capabilities for notebook computers. The CardBus standard was developed to support desktop PC system features in a PC-Card form factor for use in smart, mobile devices. CardBus cards offer higher performance than 16-bit PC Cards by taking advantage of internal bus speeds that can be up to six times faster.
PCMCIA has also streamlined the proposal and update process for making changes to the PC Card standard or for submitting new standards for consideration. Under the new process, association members can now submit recommendations and have them approved in as little as four months or two meetings.
***Lucent Technologies Microelectronics Group Licenses Tut's HomeRun Technology (October 6)
Tut Systems announced an agreement to license its HomeRun technology to Lucent Technologies Microelectronics Group.
HomeRun allows consumers to create home networks of computers and other devices over existing copper phone lines. Lucent Technologies Microelectronics Group will deploy HomeRun as part of the company's Home Wire family of home networking products. Lucent Technologies represents the fifth major semiconductor manufacturer to license HomeRun in recent months. Other chip vendors that have licensed HomeRun include Advanced Micro Devices, Intel, National Semiconductor and Rockwell Semiconductor Systems.
Tut and Lucent-along with 3Com, AMD, AT&T, Compaq, Hewlett-Packard, IBM, Intel and Rockwell-are founding members of the Home Phoneline Networking Alliance (HomePNA), which aims to deliver easy-to-use, affordable, high-speed consumer networking solutions over existing telephone wires. The first specification from the HomePNA will be based on Tut's HomeRun technology.
HomeRun creates a 1 Mbit/s Ethernet LAN over the existing random structure phone lines already in the home. No new wires or connections are required, and HomeRun operates concurrently with existing telephone (or "POTS") service. The technology provides the bandwidth necessary for today's home networking applications -- shared Internet access, shared peripherals and multi-player gaming. HomeRun is also expected to complement the new Universal ADSL technology, known as U-ADSL, being championed by Compaq, Intel and Microsoft. HomeRun technology was recently chosen as the first specification for home networking by the Home Phoneline Networking Alliance (HomePNA). The first specification is expected to be released later this quarter.
***Panasonic Finalizes Digital Television
(October 8)
Panasonic Consumer Electronics Company has detailed final plans for the introduction timing and pricing of its line of digital television (DTV) products, including:
ˇ PT-56WXF90: a 56" (diagonal) HDTV-compatible widescreen projection monitor/TV with a suggested retail price (SRP) of $5999.95, introduced at retail in August.
ˇ TU-DST50: an all-format (ATSC) DTV-certified set-top decoder with an SRP of $1,700.00, slated for introduction in late October/early November.
ˇ CT-32XF55: a 32" (diagonal) direct view DTV-compatible SuperFlat System TV with an SRP of $1,799.95, planned for introduction in late October/early November.
ˇ CT-36DV60: a 36" direct view DTV-compatible receiver/multi-scan monitor with an SRP of $3,199.95, now being distributed nationally.
ˇ PV-HD1000: an all-format digital VHS (D-VHS) videocassette recorderwith an SRP of $999.00, being introduced in December.Panasonic's DTV-certified set-top decoder, which can decode and format for display all of the standard SDTV and HDTV formats. By offering a separate all-format DTV-certified set-top decoder and HD- and DTV-compatible displays, the new digital television system will be accessible to more consumers more quickly.
***Pinnacle Systems Introduces and Ships FXDeko (October 2)
Pinnacle Systems announced the shipment of FXDeko a broadcast character generator. FXDeko provides effects, looks, and character animations in 3D space for live on-air broadcasts.
FXDeko's design features 10-bit, 4:4:4:4. FXDeko is resolution independent, and can support video formats including NTSC, PAL, 16x9, 4x3, and is DTV ready.
FXDeko's architecture is based on 3D graphics technology, which makes 3D motion effects possible. With FXDeko, users have access to the Open GL acceleration technology designed for the television industry.
FXDeko is available as a complete hardware/software solution, and has an entry price of under $40,000.
***675 jobs go at Intel
(September 28)
EE Times reports that Intel is to cut 675 jobs at its Hudson, Massachusetts, chip plant, which represent nearly half the workforce at the plant, and are in addition to the 3000 people Intel has previously announced will be laid off in the coming months. Intel acquired the plant from Digital as part of its $625m acquisition of Digital's semiconductor business in May.
***Silicon Graphics & Subsidiary Ratings Lowered; Off S&P Watch (October 6)
Standard & Poor's has lowered its ratings of Silicon Graphics Inc. and its wholly owned subsidiary Cray Research Inc. The ratings were also removed from CreditWatch, where they were placed with negative implications on March 30, 1998.
The downgrade reflects Silicon Graphics lack of profitability and weakened market position in the highly competitive workstation and high-end server markets.
The outlook is negative.
While the 1996 acquisition of struggling Cray Research Inc. gave Silicon Graphics access to Cray's technology and customer base, profitability measures have been negatively impacted by Cray's lower margins and declining revenue base. In addition, Silicon Graphics has been struggling with market share losses in the low-end workstation market to low-priced Intel-based PCs, and with an inability to expand penetration in the more profitable server market. Silicon Graphics reported fiscal 1998 revenues of $3.1 billion (down 16% from the prior year), and a net loss of $460 million (including $390 million of pre-tax restructuring charges).Despite recent operating losses and restructuring charges, Silicon Graphics has maintained a conservative balance sheet. A focus on improved working capital management and asset efficiency has enabled Silicon Graphics to preserve cash balances despite weak funds flow from operations. As of June 30, 1998 the company had more than $700 million in cash and investments. Silicon Graphics majority ownership position in MIPS Technologies Inc. provides additional potential financial flexibility.
Failure to restore profitability and revenue growth could lead to lower ratings in the near term, Standard & Poor's said.RATINGS LOWERED & REMOVED FROM CREDITWATCH
To From
ˇ Silicon Graphics Corporate credit rating BB- BB+
ˇ Senior unsecured rating BB- BB+
ˇ Bank loan rating BB- BB+
ˇ Cray Research Corporate credit rating BB- BB+
ˇ Subordinated debt B BB-
***TSMC Assessment
(September 22)
The South China Morning Post carried the following interesting assessment of TSMC.
Taiwan Semiconductor Manufacturing (TSMC) is working to meet the challenges of shrinking product life-cycles, more stringent customer demands and rising uncertainty in the global semiconductor market. TSMC, the world's largest dedicated IC wafer foundry and the island's 11th- largest manufacturer, has suffered far less from the regional financial crisis than many of its competitors. Most of TSMC's wafer output goes to IC design houses which lack their own fabrication facility (or "fab"), and integrated device manufacturers based in the United States, or indirectly sells to the US market.
"Relatively few of our final customers are in Southeast Asia, or even Japan, so the Asian financial crisis has not directly impacted our sales, which are more influenced by the US market," said Huang Yen-chun, TSMC vice-president and assistant to chairman Chang Chung- mou.
"More than 50 per cent of our direct wafer sales go to the US, and most of our clients among Taiwan-based IC design houses sell to the US," he said.Mr Huang said TSMC's financial results this year had been dragged down by overcapacity, and a subsequent readjustment, in the global semiconductor market. This was despite the fact that its relatively small output of DRam (dynamic random access chip) wafers had helped the foundry escape the most glutted segment of the semiconductor market.
After booming by more than 100 per cent early this year, net sales suffered a contraction of nearly 13 per cent in June and 16 per cent in July. Though net sales in the first seven months rose 48 per cent year on year to NT$30.37 billion (about HK$6.80 billion), the slide seems certain to make TSMC's year-end results rather less attractive than was hoped.
TSMC executives believe this year's semiconductor slump is the result of the onslaught of low-cost personal computers and the ongoing shift to "build-to-order" production management by key computer firms, which has left many chip vendors with large inventories."Before this year, we realised that life-cycles were progressively shrinking, but in 1998 the market was also affected by the transition in the computer industry to 'build-to-order' management, and the resulting need by vendors to adjust inventories, which in turn shrank orders to IC makers," Mr Huang said. But after vendor inventories had run down in August, "very urgent orders" began to come in to TSMC, Mr Huang said. "We now suddenly need to schedule and separate production for different customers very tightly, a goal which is difficult to achieve."
TSMC chairman Mr Chang said late last month the semiconductor market cycle had hit bottom in the third quarter. TSMC's revenues would rebound 10 per cent in August from July's $3.03 billion, and rise another 20 per cent in September, a forecast that has been echoed by executives of other Taiwan IC makers.
A continuation of this trend through the peak fourth quarter would leave TSMC with net sales close to $55 billion, up nearly 25 per cent over last year's $43.94 billion, and allow the firm to close the year with a respectable 29 per cent growth in pre-tax earnings to $20 billion, according to a forecast by Wealth daily.
"Recent customer response shows that next year should be somewhat better, and we hope the first quarter in 1999 will show results similar to those in the fourth quarter this year," Mr Huang said.
Meanwhile, TSMC has acted to ease short-term financing pressure by reducing capital expenditure this year from a planned US$1.3 billion to $920 million. TSMC had intended to invest the funds to buy equipment to expand production capacity by 40 per cent over last year to a level of 167,000 eight-inch wafers a month in its five existing plants in Hsinchu.
Mr Huang said the project was almost complete, but management had delayed the replacement of equipment for 0.35-micron production with more advanced 0.25- micron equipment in some of the firm's factories. TSMC was operating at 75 percent capacity, so the company had "slowed the process upgrade until we can evaluate market conditions next year".However, TSMC would complete the construction of its sixth wafer factory in the new Tainan Technological Industrial Complex on schedule by year's end, Mr Huang said. The new NT$66 billion plant would have two modules. Module "A" would enter production early next year with a monthly capacity of 30,000 eight-inch wafers.
Module "B" might be devoted to more advanced 12-inch technology if the appointed vendor could deliver necessary production equipment. "If the equipment does not arrive promptly and we need the capacity next year, Module B will also be devoted to eight-inch wafer production," Mr Huang said.
In any event, TSMC's seventh plant ("Fab 7"), which was also now under construction in the Tainan zone, would be dedicated to 12-inch wafer production.
Mr Huang said the next generation of 0.18-micron wafers would be available from TSMC in the first quarter of next year, and that "enhanced" 0.15-micron and 0.18-micron wafers (with embedded circuitry made with copper instead of the standard aluminium) would be offered from the fourth quarter.
Also, TSMC's 51 per cent-owned WaferTech joint venture in Camas, Washington, began shipments of 0.35-micron static random access memory wafers in July, a month ahead of schedule. The US$1.2 billion project not only represented TSMC's first offshore capital investment, but marked a landmark reverse flow of semiconductor technology back to the US and the first foreign investment in an IC manufacturing facility in more than a decade.
Mr Huang said TSMC had no direct business as yet with the mainland, saying it was premature to consider investing there.
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