Wed, Nov 28, 2001 page17

• TSMC unit hires former employees

  SEMICONDUCTORS While WaferTech, the company's US subsidiary, was blamed for generating losses earlier in the year, it is now creating profits

  • By Dan Nystedt / STAFF REPORTER
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  In one of the first examples of a company hiring back workers since the global downturn shut down production lines this year, a US subsidiary of Taiwan Semicon-ductor Manufacturing Co (TSMC, 台積電) began taking people back, the company said yesterday.

  "We are experiencing an uptick in customer orders. As a result, WaferTech LLC is beginning a small recall of production specialists to help handle demand," said Tzeng Jinnhaw (曾晉皓), a spokesman at TSMC, the world's leading contract chipmaker.

  "[WaferTech managers] haven't decided how many yet. This will depend on orders. If orders remain strong, then more and more people will be rehired ..."

  Washington State-based WaferTech laid off 280 people in May and another 44 in September. At the same time, TSMC imposed a hiring freeze, but did not fire workers or idle plants, even though half of its production lines were not being used.

  Now new orders for state-of-the-art chips from companies such as graphics chip firm Nvidia, which designs chips for Microsoft's Xbox, are increasing, are making factories hum again.

  TSMC officials told the Taipei Times last week that demand for its highest technology manufacturing processes had increased significantly.

  One chip executive who asked not to be identified said TSMC plants that make chips using tiny 0.18, 0.15 and 0.13 micron pro-cesses have been completely filled with orders. Such fine manufacturing -- etching transistors over 100-times thinner than a human hair onto a chip -- commands the highest prices.

  Signs of a high-tech industry turnaround bode well for Taiwan. The chip industry is a leading indicator of how the overall tech industry is doing, and the sector was poised to make a record 31 percent drop this year.

  Companies like US-based Intel and AMD responded to the downturn by slashing CPU prices in order to spur computer demand. Rising demand for new products like game machines and DVD players has also kick started the industry in the fourth quarter, according to analysts.

  Taiwan's central bank governor said yesterday a US turnaround would precede a rebound here.

  The recession in the US has had a major impact on the domestic economy. Nearly 25 percent of Taiwan's exports go to the US, most of which are high-tech products.

  Taiwan's unemployment rate hit 5.33 percent this month, the highest on record, and the government says the economy will contract by as much as 2.12 percent for the year.

  WaferTech's rebound immediately impacted TSMC's bottom line. New orders have been coming in so fast that TSMC on Monday revised its after-tax profit forecast up by over 50 percent to NT$14 billion (US$406 million), and its sales forecast for the year to NT$125 billion.

  Earlier this year, TSMC Chairman Morris Chang (張忠謀) blamed company losses on WaferTech. These losses pushed TSMC's pre-tax income into the red for the last two quarters. Only government tax breaks for new chip plants and equipment saved the company from reporting consecutive net losses.

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