IBM looks to Asia-Pacific semiconductor markets

IBM looks to Asia-Pacific semiconductor markets

SINGAPORE (AFP): International Business Machines Corp. (IBM)
launched the Asia-Pacific hub of its semiconductor operations
here yesterday to spearhead expansion in the region's rapidly
growing microchip markets.

IBM officials forecast a turnaround this year in the global
semiconductor industry, which was badly hit in 1996 by excess
inventories and a big drop in prices due to a cyclical downturn
in electronics demand.

"Asia Pacific semiconductor consumption is forecast at US$75
billion for 1997 -- which is close to 50 percent of worldwide
total consumption," said Kenneth Kin, regional vice president of
IBM Microelectronics.

"This is set to grow to $139 billion in the year 2000," he
said at the launch of IBM Microelectronics Asia Pacific
headquarters. "We are thus looking at a region that is the center
of growth for the worldwide semiconductor industry."

Kin said the division would tap data processing,
communications and consumer markets in the Asia-Pacific and build
strategic alliances with firms in the region, adding that future
plans include a regional design center.

IBM Microelectronics develops, manufactures and markets
advanced semiconductor technologies and products ranging from
high-performance memory microchips to microprocessors.

The division has more than 30 years' experience in the
research and development of semiconductors, but it was supplying
its products and services exclusively to IBM until 1992 when it
entered the merchant market.

Since then, its merchant market revenues have increased more
than 10-fold, company officials said.

The new headquarters will help strengthen IBM
Microelectronics' market presence in Asia, where its sales have
grown substantially, and bring it closer to its customers, they
said.

Michael Attardo, IBM Microelectronics' general manager, said
the division wanted to "actively participate" in major markets
such as Taiwan, Japan, Hong Kong and Singapore as well as
emerging markets such as China, India, Malaysia and Thailand.

"We want to be where the growth is and we chose Singapore ...
because it offers excellent access to the rest of the region,"
Attardo said. "The Asia-Pacific region is important to our
worldwide success."

Electronics-dependent Asian economies such as Singapore are
hoping for a turnaround in the semiconductor market this year to
boost their flagging exports.

The global semiconductor industry output fell seven percent
last year. In Singapore, home to 35 semiconductor companies and
140 supporting industries, output increased a modest three
percent year-on-year to $8.6 billion.

John Gleason, IBM Microelectronics' general manager for
marketing and sales, forecast that a turnaround was near, citing
a cut in South Korean production and the development of new
technologies.