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Politics : Formerly About Applied Materials
AMAT 301.11+6.9%Jan 9 9:30 AM EST
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To: Terry Davis who wrote (10426)11/5/1997 7:13:00 PM
From: Math Junkie  Read Replies (1) of 70976
 
<<Exactly what costs does a devalued currency lower?>>

I don't know what Morgan had in mind, but my theory is that the Asian fabs do business in dollars, because they get dollars for their chips and they pay dollars for their semi equipment. I have heard that they have large dollar-denominated deposits in U.S. banks as well. Measured in dollars, the devaluation lowers their labor costs, assuming they pay their employees in the local currency. The same would be true of other costs that were paid for in local currency, like electricity and water bills.
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