Indeed, for many tech companies, the Asian plunge could even be a plus. Devaluation could cut manufacturing and component costs for companies with large Far East operations such as Compaq, Intel, and Philips Electronics. Moreover, Asian manufacturers are likely to scale back expansion plans--perhaps slowing the flood of memory chips that has pushed down prices and pinched U.S. chipmakers Micron Technology Inc. and Texas Instruments Inc. (page 134), says TI Chief Economist Vladi Catto. ''Any postponements in Korea and Taiwan will bring demand and supply into equilibrium earlier,'' he says.
From the current BUSINESSWEEK magazine dated Nov 10, 1997 (Page44)
On the other hand, TI's memory chips--which have been hampered by soft prices--have been a drag on sales, on earnings, and on the stock price. But Jonathan Joseph, who tracks the industry at NationsBanc Montgomery, believes that chip prices are flattening out and that further sharp drops are unlikely.
Increased demand as the market heads into its strong season is soaking up excess DRAM capacity, notes Joseph. He figures that a recovery in TI's DRAM business could add 30 cents to 50 cents a share in earnings. He thinks TI will earn $4.28 a share this year, $6.25 in 1998, and $8 in 1999.
From the current BUSINESSWEEK magazine dated Nov 10, 1997 (Page134)
SUMMARY:
1-Asian plunge could even be a plus: slowing the flood of memory chips
2-chip prices are flattening out and that further sharp drops are unlikely. |
