Industry analysts predict that the 2-year-old, worldwide semiconductor slump may drag on due to the Asian financial crisis, lackluster personal computer demand, and a worldwide glut of memory chips. It now appears that the US$140 billion industry will not return to its historical annual growth rate of 17 percent for at least another 18 months, experts said.
As if to prove the point, the day after the chip forecast came out, Motorola (MOT) said it might report a loss in the second quarter, and will lay off up to 15,000 workers. Other chip companies are making similar cutbacks. Intel (INTC), a company that may be facing FTC antitrust action as early as today, has said that it plans to eliminate up to 3,000 jobs. National Semiconductor (NSM) plans to lay off 1,400 people. Applied Materials (AMAT), the biggest equipment supplier to the industry, is offering voluntary severance packages. Even computer-chip power Samsung Electronics said Monday it would suspend production of all memory and most non-memory chips for seven days beginning 14 June in an attempt to turn falling prices around. Hyundai Electronics will suspend computer chip production for one week, beginning 3 June. And the third big South Korean chip maker, LG Semicon, is also considering curtailing chip production.
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EarthLink gets paid: EarthLink Network Inc. (ELNK) took in a handsome $24 million in cash from Sprint Corp. (FON) as part of their previously announced agreement to create the EarthLink Sprint Internet service, the companies said Monday.
For a 28 percent minority stake in Pasadena, California-based EarthLink, Sprint not only put up the cash, but also committed significant network infrastructure, a $100 million credit line, approximately 130,000 new members and the promise to deliver a minimum of 750,000 new members to EarthLink over the next five years. Two Sprint executives will now sit on the EarthLink board, while long-time EarthLink board member John W. Sidgmore, president and chief operating officer of WorldCom and CEO of UUNET, resigned his seat. EarthLink now has 680,000 members and has been hard at work with Sprint to develop a marketing strategy targeted at a mass audience like that of America Online.
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Lotus, Verity settle dispute: Lotus Development (LPFC), a subsidiary of IBM, and Verity (VRTY) have signed a licensing agreement and settled their legal problems. Lotus said the agreement gives it licensing of Verity's KeyView filtering technology across the Lotus product line, and site licensing for internal use. Terms of the licensing agreement were not disclosed.
Verity, the maker of search and retrieval products, sued Lotus in March for copyright infringement, misappropriation of trade secrets, and other offenses, alleging breach of a 1992 license agreement.
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Yahoo will acquire Viaweb: Search-engine giant Yahoo (YHOO) said today it has signed a definitive agreement to acquire privately held software maker Viaweb, in a stock deal valued at $49 million. The Cambridge, Massachusetts-based Viaweb makes software and reporting tools for building and operating online commerce Web sites. Based on the existing Viaweb store service, Yahoo has launched Yahoo Store, a Web site offering new online merchants a setup, design, hosting, and promotional service.
