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Politics : Formerly About Applied Materials
AMAT 223.95+1.7%Nov 21 3:59 PM EST
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To: Proud_Infidel who wrote (13708)12/20/1997 9:01:00 PM
From: Jacob Snyder  Read Replies (1) of 70976
 
I don't understand why:

It has been repeatedly stated on this thread that devaluation of local currencies should not affect the ability of companies' to purchase capital equipment. The logic is that the money is borrowed in dollars, and the chips are sold for dollars, and the equipment is bought in dollars. Local currency is only used to pay workers, and therefore a devaluation should improve the balance sheet. Apparently, there is a hole in this argument, somewhere. From Semi. Business News 12-19:

Samsung waits for Won recovery
before expanding new Austin fab:

SEOUL--Samsung Electronics Co. Ltd. here is waiting to see if the value of the Korean Won recovers before launching its second-phase expansion at its new wafer fab in Austin, Tex. The second phase would double output to 25,000 wafers a month.

Officials said the 40% decline in value of the Won against the U.S. dollar since October suddenly made foreign equipment purchases for the expanded fab far more expensive.

Also, the Scottish government secretary told the British Parliament that Hyundai Electronics Co. was deferring its planned $3 billion chip fab in Scotland due to the Korean financial crisis.

Meanwhile, Korean Telecom, the government-owned phone and wireless operator, also said it will trim capital spending by 30% next year, which would impact the country's growing market for communications chips.
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