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Technology Stocks : Oak Technology (OAKT)

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To: Dan Spillane who wrote (3618)	11/20/1997 6:47:00 PM
From: Daniel Shaffer	Read Replies (1) of 4335

Ditto on the Potential Benefits of the Currency Devaluations Dan is correct. The exchange rate for the NTD (New Taiwan Dollar) is currently around 33 to the US Dollar, up from 28.5 a couple of months ago and 26.5 about a year ago. In other words the US Dollar buys 25% more NTD than it did a year ago. If OAKT's contracts with fabs in Taiwan are in NTD, then the savings will go right to the bottom line. If, however, their contracts are in US Dollars, these savings won't be automatic. They will have to try to renegotiate with the fabs. Most likely, there is some kind of language in their contracts dealing with currency fluctuations and how these will be handled. The main impact of the Asian economic problems could be reduced demand in Asia for OAKT chips, but I don't expect that. My reasoning is that computer and CD-ROM buyers in Asia are either people who have to upgrade to use current software or first time buyers (especially in China) who see a personal computer as a "gotta have" to give their child or children a head start in their highly competitive societies.

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