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To: Calvin who wrote (143723)	10/4/1999 7:28:00 AM
From: Lee	Read Replies (1) \| Respond to of 176387

Hi Calvin,..Re:. Taiwan's mammoth earthquake Don't know if this has been posted yet but it looks positive for PC and chip manufacturers. <g> Monday October 4, 6:40 am Eastern Time ANALYSIS-Taiwan high-tech slowdown fears overdone By Alice Hung TAIPEI, Oct 4 (Reuters) - Taiwan's mammoth earthquake has caused some disruptions in the global electronics supply chain and sent shockwaves through Wall Street, but analysts said on Monday the jitters were probably overstated. They said the September 21 temblor that killed 2,200 and paralysed the technology-heavy island's industrial production for days with sweeping power outages would have only a temporary impact on electronics-related output. ''We don't believe there is going to be a significant impact on the world supply chain,'' said Merrill Lynch analyst Dan Heyler. ''It's an exaggeration to say it (the quake) hit the entire electronics foodchain,'' Heyler said. QUAKE USED AS SCAPEGOAT Heyler and other Taiwan-based analysts said some U.S. companies were using Taiwan's earthquake as a convenient scapegoat to explain away their poorer-than-expected performance. Hewlett-Packard Co (NYSE:HWP - news) chief executive Carly Fiorina on Friday warned of lower sales, saying Taiwan's tremor would cause some disruption "in some elements of our PC supply chain. Fionina's comments prompted Wall Street analysts to lower their forecasts and sent Hewlett-Packard share price tumbling nearly five percent in Friday's session. Similarly, shares of Dell Computer Corp (NasdaqNM:DELL - news) and Apple Computer Inc (NasdaqNM:AAPL - news) have been shaken following Wall Street analysts' warnings of Taiwan quake aftershocks hitting their sales. But analysts in Taiwan said firms contracted to make PCs for H-P were not seriously affected by the quake or subsequent electricity rationing as many have back-up power supplies, and were producing at normal levels. To minimise disruptions to crucial technology exports, power was restored fully to Taiwan's high-tech manufacturing hub -- Hsinchu Science Park -- within a week after the quake. POWER RATIONING EXPECTED TO END Power rationing for remaining industrial users was expected to end on Tuesday as damaged distribution systems were bypassed. A September 29 Reuters canvas of Taiwan's top 20 listed electronics firms found virtually no significant damage and only brief production delays of a week or less. ''H-P's reliance on Taiwan PC makers is not significant and PC sales only account for a modest portion of its overall sales,'' said Tony Tseng, elctronics analysts at SBC Warburg Dillon Read Securities. ''Heaping blame on Taiwan is more like an excuse.'' Andrew Lu, electronics analyst at Credit Suisse First Boston, gave a similar assessment. ''Wall Street is using Taiwan as an excuse to correct the already high share prices,'' Lu said. Almost all Taiwan PC makers said the quake impact was limited and temporary. These include Compal Electronics and Quanta Computer Inc , which make notebook computers for H-P and Dell, and Asustek Computer Inc , First International Computer Inc and Mitac International Corp , which make H-P branded desktops. Lu said freezes on major corporate PC buying in the final months before the Y2K ''millennium bug'' event was more likely to be a main factor slowing U.S. computer giants' sales. ''FOUNDRY'' CHIPS TAKE HIT Lu saw a bigger impact on the made-to-order ''foundry'' chipmaking -- a Taiwan speciality -- saying local chipmakers would suffer 20-25 percent sales declines in September and 15-20 percent reductions in October due to halted production. Graphic cards and chipsets, for which Taiwan makers account for about one-third of global production, would be in short supply for about two months, analysts said. Analysts expected chipset shipment delays through early November by three top makers -- VIA Technologies Inc , Silicon Integrated Systems Corp, or SIS , and Acer Labs -- but called the longer-term outlook bright. ''From the long-term investment viewpoint, this is a buying opportunity,'' said Lu of Credit Suisse First Boston. (US$=T$31.8) biz.yahoo.com Cheers, Lee