$2.6bn on semi capex by the Koreans? Don't bet on it. I had a debate with EABDad not too long ago on this very thread about this subject. Talk about flogging a dead horse. You think that the combined LG/Hyundai is going to turnaround from spending virtually nothing last year to suddenly dropping $1.8bn on leading edge equipment within this year? Samsung doesn't even spend that much, they only expect to spend $1.2bn.
So who is going to give LG/Hyundai all that money? Would you want to buy bonds from those guys if all they are going to do is turnaround and shoot themselves in the head by flooding the market with supply? That right, even if they were able to place such a huge amount of debt, what rates do you think the market would demand? 10%? 15%? 20%? What then happens to their interest burden? Yep - it skyrockets. These would be low quality bonds here, not even close to investment grade - remember that they were close to insolvency 12 months ago. The Korean banks going to loan them the money with the state of their balance sheets? Even if debt/equity swaps were in place it would still not be sufficient, not to mention the uproar from the IMF/USTR etc. Don't believe everything that Jack Robertson tells you, he is just regurgitating what the company spokesperson would like you to hear. All good journalists like a yarn, but they are not so good at analyzing and cross referencing data that throw up inconsistencies and conflicting information.
Fabeyes, you of all people should understand that once a decision is made to buy equipment it is not delivered by FedEx the following day. Nor do you just plug it in and start churning out DRAMs by the millions. Firstly you have decide what to order, secure financing (L/C's) which takes a number of weeks/months, then delivery usually takes anywhere from a month to 9-10 months depending on the equipment (those high NA scanners have long leadtimes), test runs usually take another month or so and then mass production is begun. It ain't going to be 1999 by the time that happens, we will be well into 2000 by which time DRAM bit demand will have jumped another 80%.
Place everything in context, take two aspirin and relax. Despite the panicky posts I have seen of late, the chip shortage is still here and it ain't going to disappear overnight. |
