Teradyne Message Board - Msg: 3038151

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Technology Stocks : Teradyne

TER 198.49

+0.7%

3:59 PM EST

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To: William T. Katz who wrote (637)	12/24/1997 12:34:00 PM
From: Mike Botham	Read Replies (1) of 1184

Bill, Software testing is a pretty new concept and the revenue stream from this is probably small compared to semis. It could be big in the future, but I don't think it will significantly effect Teradyne's business in the next few years. I think the big fear is not a downturn in business in Asia, although there is sure to be one. The problem is that Asia is moving into an overcapacity type recession in semiconductor production. The fear is that this might cause dumping of product in the US or just severe downward pressure on profit margins for US semi companies. Same thing for computers etc. If this all translates into problems for US producers of technology, then a downturn in their equipment buying is likely to follow and it won't matter that a given company doesn't sell much in Asia. This business is historically VERY cyclical and is coming off a record year. Record years are usually followed by slumps and when this business slumps it really slumps. Take a look at a ten year chart for Teradyne or LTX. It usually takes quite a while to rebuild the bottom after the stock tanks like it has in the last few months. Mike

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