All:
This morning via CNBC, Kramer was really negative on the techs, the networkers in particular. He said he sold his CSCO position for the first time in years. He sees further slowdown in the networking sector. He thinks the Asia situation will spill over and depress the numbers of many top US companies, including MSFT which derives about 40% of revenues from Asia. He was very bearish on AMAT as well.
I don't have an opinion on the matter...his guess is as good as anyone else's, I imagine. Well, maybe just one along the lines of his AMAT comments. I do believe that in order to remain competitive with the West, Asia must continue to invest in technology regardless, in order to progress -- lest it fall further behind. Asia trails the US in most segments, and Europe trails the US even further. Sure, there will probably be some slowdown in many Asian sectors, but I think such areas as semiconductor equipment will turn out to be more robust than people expect. The major western chip manufaturers have already begun a long-anticipated migration down to .25 micron chip manufacturing for smaller-die, yet faster micro-processors. This move is expected to pick up momentum in '98, and this requires re-tooling of DUV laser lithography equipment (steppers/scanners), chemical processing, improved wafer technology, etc. It goes on and on down the chain. If Asia doesn't invest in this move, they will be caught flat-footed late next year in the market for next-generation chips. Entrapment in low-margin, commodity markets for low-end chips should be plenty motivation for them to invest in future technology before they get left behind. Also, I have to wonder whether the Asian economies will lower interest rates as they get further pressed...this may encourage borrowing by corporations in order to invest in the technology they need -- after all, high-tech companies must look a few years ahead, beyond the current crises.
That got way off topic... ;o)
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