A planned increase in Motorola Inc’s capital spending this year will go toward adding semiconductor capacity to meet stepped up demand, George Fisher, chairman and chief executive, has been telling analysts. The company projects spending of $2,000m, up from $1,390m a year ago. We’ve had a strong 1992 and 1993 looks like it’s continuing the pace, Fisher said, while declining to make an earnings forecast. Tommy George, president of the company’s Semiconductor Products Sector, said microcontroller usage will jump between now and 2000 – the company estimates that typical automotive microcontroller applications will rise to 35 per vehicle from a current 14; the number in the office, in everything from pagers to telephones, will go to 42 from 18; and in the home, in everything from appliances to exercise equipment, will increase to 226 from 69.George said Motorola was adding incremental capacity expansion to its semiconductor production facilities. In Austin, Texas, the company was accelerating production ramp-up of MOS11 devices, while it was increasing surface-mount assembly capacity in many plants. Production of MOS12 8 wafers in Chandler, Arizona is expected to begin in mid-1994, George said, and the joint venture with Toshiba Corp is to begin 16M-bit memory chip fabrication in Japan in 1995. Robert Weisshappel, senior vice-president of Motorola’s Cellular Subscriber Group, said that the scare earlier in the year over cellular phone safety had not affected sales. Motorola continues to take a proactive role in the matter, Weisshappel said, adding that some $25m in research aimed at evaluating the biological effects of electromagnetic waves would be conducted over the next five years. Hector Ruiz, general manager for the Paging Products Group, said the company was testing advanced messaging – two-way paging technology that enables a user to acknowledge a page.On research and development, the company says that expenditures will reach $1,500m this year, up from $1,310m last year. Chris Galvin, senior executive vice-president, said accounts receivable have shown improvement, narrowing to seven weeks in the second quarter compared to 7.8 weeks a year earlier. He also said inventory turnovers in the period totalled 5.6 times, compared with 4.6 a year ago. President Gary Tooker said that Motorola is still aiming for compound annual sales growth in the 13% to 16% range, which means it would be a $50,000m a year company in 10 years. More than half the company’s sales are outside the US, and this could hit two-thirds within the next five years as markets open up in China and the former Soviet Union.
