Shane:
Re: Korean chip makrs problems
Given the following analogy, I have a supermarket, Mr. Smith also has his super market, and Mr. Jones also has a supermarket in the same neighborhood. Mr. Jones always cuts his prices of food and therefore making me and Mr. Smith to also cut our prices. One day Mr. Jones realizes that he no longer can pay his mortgage to the bank and can not afford buying anymore food to sell to the market! So he goes out of business. Now, does this mean that Mr. Smith and I continue to keep our prices down if no longer Mr. Jones cuts his prices?! I think not!
Less competition means more control of the chip market by those who remain in the market! So if Korean chip makers can not expand due to their economic problems, - then tough, and I think that would be an extremely positive news for their competitors (especially the US chip makers that can instead go and take advantage of the low production costs in Korea - thanks to their falling currency - and not only boost their earnings but at the same time help the Korean economy via their investments)! If these analysts fear of the cut in demand of chips, that in my opinion, is pur nonesense! Certainly South East Asia's demand for chip may diminish - (not because they do not have any need for it but simply because they can not afford buying it)! However, South East Asia is not the entire world!
In a world where everything runs on the technology, and the most optimum productivity (and therefore low inflation and economic prosperity) is gained through the utilization of technology, chips (and especially ASICs) are like water to a thirsty man in the Arabian desert!
Just my humble opinion....
Regards,
Addi Jamshidi |
