Atmel - the trend is about to change Message Board

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Technology Stocks : Atmel - the trend is about to change

ATML 8.140

0.0%

Apr 12 5:00 PM EST

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To: Jack Kunkle who wrote (7574)	12/13/1997 4:32:00 PM
From: gpphantom	Read Replies (1) of 13565

On one hand It is true that selling in dollars reduces your Forex exposure but you trade that specific exposure for increased credit risk. Having obligations in dollars when your currency is weakening increases the risk of delayed payment and non-payment. One has to hope the SEA customers hedged their purchase transactions. Atmel still has Forex risk because now its product is more expensive. A customer sourcing product from a strong currency supplier is at a competitive disadvantage and will search out alternatives. The strong currency supplier may be forced to cut margins to compete. If you say "but Atmel's the only supplier," that can only be considered a temporary advantage, alternatives will be sought. Regarding hedging, a U.S. company selling in a foreign currency can hedge its exposures and thus maintain a level of control. The U.S. company who expects his customer to manage the risk may lose the customer altogether.

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