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Technology Stocks : C-Cube Microsystems

CUBE 35.98

-0.9%

12:31 PM EST

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To: BillyG who wrote (101)	12/12/1997 1:52:00 PM
From: Maya	Read Replies (2) of 324

BillyG Why does Cube slide? It is not the cashflow and the contribution of the Asian situation to the slide has to be limited. Looking at the growth charts, it is obvious that for Cube there has not been any growth for the past year. Unless it proves again by posting some real growth numbers, the market is not going to appreciate it. The potential may be there, but the proof is in the pudding. In the case of the Asian problem, companies in countries such as Korea find it hard to get money for expansions. It may take several months before they can go back to their original expansion schedules. It will affect capital expenditure related companies such as Kulicke and Soffa. It will be a positive for companies such as Micron. Koreans wouldn't be able to build more and more chip plants and dump all the chips that they can produce. With the currency problems, they will be in a level playing field with non-Asian manufacturers. While you all keep talking about the Asian problem, I am not able to see how it is going to affect Cube directly? Reduction of consumer demand for VCDs due to currency problems? This will take longer and won't be dramatic. Since a TSMC won't be able to expand faster, Cube may have to find other alternatives in case they have to have further capacity. Foundry costs could go higher in the future, but the costs will be passed on to the consumers. Could you throw some light at the Asian situation and Cube? BTW, banks such as Citibank know somewhat about the extent of the problem but are keeping quiet. Japanese banks' fiscal year ends in March (?). At that time Japanese banks may come out and state their losses due to the Asian flu causing further problems for the world markets.

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