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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: carepedeum2000 who wrote (12653)	9/23/1999 1:58:00 PM
From: Joe Smith	Respond to of 57584

Chip stocks down on Taiwan earthquake. But, so far it is having little effect on tech stocks. I think it will end up having a bigger impact. I lived through Loma Prieta in the Bay Area. This was an eathquake with moderate damage and it had a profound effect on the Bay Area economy. Even after the power was back on and the glass was cleaned up, business was effected as it was so hard to get anywhere. Also money went to infrastructure, putting a strain on borrowing. Kobe and Northridge quakes had huge effects on their economies. Taiwan quake is more like these, if not worse in damage. Taiwan is a major Pacific rim economy and a major cog in the computer supply chain, motherboards especially. So what are the results? For the US, the good news is probably a boost for the sagging dollar. For the computer industry, the bad news is a major kink in the supply chain, bottlenecks, and a cut into razor thin margins. I think you will be hearing about this from chipmakers and boxmakers as we hear earnings. Of course, no effect on this Quarter, but I think that many of them will mention the threat of this problem to future earnings. It won't take long to get the fab plants cleaned up and the equipment fixed, but it will take some time to get up to full capacity with a full complement of employees able to get to work and it will be even longer until you see expansion at the current rate. Anyone looking to borrow money in Taiwan to expand is going to have to compete with huge and very important infrastructure projects. All this of course IMHO