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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Maurice Winn who wrote (7926)	8/29/2001 7:12:18 AM
From: TobagoJack	Read Replies (1) \| Respond to of 74559

Hi Maurice, When demand eventually turn up (yes, I can be a optimist just like you), it may be overwhelmed by supply (oops, there I go again). I actually am starting to think electronic hardware may never be a good 'growth' business again, given the ease of know-how transfer, and hog wild capacity building still going on. nni.nikkei.co.jp QUOTE Wednesday, August 29, 2001 ANALYSIS: Electronic Device Firms Aggressively Invest In China TOKYO (Nikkei)--Major electronic device makers in the Osaka area are scrambling to build production bases in China and other foreign countries. The move contrasts with that of leading semiconductor makers, which are closing plants and scaling back capital investment due to the prolonged weakness of the information technology market. Device manufacturers, preparing for an expected recovery in demand, have been particularly aggressive in China where many of their clients are operating. In July, Nitto Denko Corp. (6988) announced that it would build a new plant in China to manufacture high-density flexible circuit boards used for mobile phones and liquid crystal displays. The company will spend 10 billion yen on the plant, to be located in Suzhou in Jiangsu Province. Construction is already under way, and operations are slated to start in the spring of 2003. The company is also building a new plant in Wisconsin, in the U.S., which will manufacture industrial adhesive tape used to glue electronic devices and protect their surface. The plant, involving an investment of 6.5 billion yen, will start operating next spring. In September, the company will also establish a local processing subsidiary in the Philippines. Murata Mfg. Co. (6981) recently set up a manufacturing and sales subsidiary for electronic devices in Jiangsu. In October, the subsidiary will begin producing chip-laminating ceramic condensers, used to adjust the circuits of PCs and other electronic equipment. The firm invested 100 billion yen in plant and equipment last fiscal year, but felt that additional capacity was needed, despite the adverse business environment. Sumitomo Special Metals Co. (6975) began constructing a plant in the suburbs of Shinsen, China, at the end of July. The firm will invest 1 billion yen in the project. The plant will produce a small-sized version of NEOMAX, a rare-earth magnet used for core components such as microspeakers of mobile phones and pickups which read data on CDs. The plant will start full-scale operations next April. These companies are finding that they cannot bolster international competitiveness by scaling back investment. Instead, they have realized that they need to closely monitor developments in China. Targeting manufacturers from worldwide of mobile phones, PC peripherals and audiovisual equipment which are operating in China, the company wants its new Suzhou plant to play the key role in its reorganization of Asian operation. Sumitomo Special Metals, which has about 50% of the global market for small-sized special magnets, plans to make about half of these magnets in China. Business strategy manager Kaoru Doigawa said, "It is natural for parts makers to go where equipment manufacturers gather." Murata Mfg. has opted for a cautious approach, renting a new plant and initially limiting investment to 600 million yen. The company stepped up its capital investments last fiscal year, although it tried to minimize fixed outlays by limiting an increase in hiring. Although it too is bullish on China, it is proceeding cautiously given the prolonged slump in demand. (The Nihon Business Daily Wednesday edition) UNQUOTE

To: Maurice Winn who wrote (7926)	8/29/2001 7:14:38 AM
From: TobagoJack	Respond to of 74559

Yikes, more creative destruction of value ... smaller, faster, less expensive, easier to make in volume, and satisfying saturating demand. Voice recognition and video everything better be implemented fast to absorb what will be soon on tap ... nni.nikkei.co.jp QUOTE Wednesday, August 29, 2001 M'bishi Elec To Offer Sample 512Mbit DDR DRAM In Nov TOKYO (Nikkei)--Mitsubishi Electric Corp. (6503) announced Tuesday that it will begin shipping samples of 512Mbit Double Data Rate Dynamic Random Access Memory (DDR DRAM) chips in November. By coming to market early with a larger-capacity version of this fast-cycling memory device, the company hopes to cultivate demand for DDR DRAM for use in high-end servers and workstations. Mitsubishi fabricates the DDR DRAM using a 0.15 micron process. The device can handle data transfer rates as fast as 2.1 gigabytes per second. The sample price starts at 14,000 yen each. The company also intends to offer sample 512Mbit SDR DRAM (Single Data Rate DRAM) chips as well as 256Mbit DDR DRAM and SDR DRAM chips, releasing them successively from October. Samples of the 256Mbit chips will be priced at 5,000 yen and up. With a surface-mount area of 140 sq. mm, they take up half the space of comparable products, the company claims. (The Nikkei Business Daily Wednesday edition) UNQUOTE

To: Maurice Winn who wrote (7926)	8/29/2001 7:17:01 AM
From: TobagoJack	Respond to of 74559

But this Japanese Greenspan says not to worry ... nni.nikkei.co.jp QUOTE Wednesday, August 29, 2001 Hayami: Don't Think Stock Falls Greatly Hurt Fin System OSAKA (Dow Jones)--The Bank of Japan will study inflation targets for possible future use, the governor of the central bank said Wednesday. "I don't think it is appropriate now, but we will study the issue closely for the future," Hayami said in a news conference in Osaka. "Inflation is favorable for cash borrowers, but bad for cash lenders and households... It would be a problem socially, as well as politically," he said. Hayami said the BOJ's decision in March to hold overnight rates virtually at zero until consumer prices start rising doesn't amount to an explicit inflation target. "The policy directive regarding CPI (the consumer price index) is not an inflation target, but it shows the BOJ's strong will to stop prices from falling," Hayami said. The governor added that the BOJ is ready to do its utmost to achieve an economic recovery and stop prices from falling. Two weeks ago, the BOJ policy board decided by majority vote to increase the quantity of money it supplies to the financial system by lifting its bank reserves target by Y1 trillion to Y6 trillion. While it is too early to fully judge the effects of the easing move, Hayami said that the action had been effective in keeping September half-year bookclosing rates from rising. But the governor reiterated remarks in an earlier speech that monetary policy alone isn't enough to stimulate an economic recovery without structural reforms. Hayami, speaking after the Nikkei 225 stock index closed at a near-17 year low, appeared unconcerned about the recent slide in share prices. "I don't think the fall in stocks would really hurt the financial system," he said. But he emphasized the bank will continue to monitor stock prices carefully. Hayami reiterated foreign exchange rates should be set by the financial markets and that the recent rise in the yen reflects weakness in the dollar and not yen strength. UNQUOTE

To: Maurice Winn who wrote (7926)	8/29/2001 7:30:41 AM
From: TobagoJack	Read Replies (1) \| Respond to of 74559

What goes down will hopefully go up eventually ... such is the state of Japanese leadership ... I am hoping something got lost in the translation and the Finance Minister didn;t exactly mean what he supposedly said. quote.bloomberg.com QUOTE Economies 08/29 05:49 Shiokawa Hopes Japan's Nikkei Can Defy Gravity and Start Rising By Peter Vercoe, with reporting by Tomoko Yamazaki, Daisuke Takato and Yoshiko Matsushita Tokyo, Aug. 29 (Bloomberg) -- Japanese Finance Minister Masajuro Shiokawa wants to defy the laws of gravity, hoping that what goes down must come up. Asked what he thought of today's 1.9 percent slide in the main Nikkei 225 stock index to below 11,000 for the first time in 17 years, the 79-year old finance minister said: ``I don't understand why it's falling so much. The only thing I can do is believe that something that falls will eventually start rising.'' That's not good enough for investors, who want the finance chief of the world's second-biggest economy to arrest an 18-month skid that's lopped 46 percent off the index. Solutions first proposed early this year, such as cutting capital gains taxes on stocks and setting up a government-backed body to buy stocks from banks, are still being debated by government officials. ``As finance minister he should not hope, but do something effective to solve Japan's problems,'' said Chua Soon Hock, chief executive at Asia Genesis Asset Management Pte. in Singapore, who's been investing in Japan for 18 years. ``That's his job.'' Other policy makers were also at a loss for answers on how to stem the Nikkei's decline. ``It's serious,'' said Taro Aso, the LDP's chief policy maker. ``There's no question it will have negative effects on the economy.'' The most likely response is extra government spending. Shiokawa said the ``right conditions exist to compile an extra budget.'' That would mean more of the same for investors -- 10 spending packages in the past eight years, worth 130 trillion yen ($1.1 trillion), have failed to halt Japan's economic slump. No Quick Fix The Nikkei's decline was led by banks such as Mizuho Holdings Inc., which dropped after Financial Services Minister Hakuo Yanagisawa said the government expects it will take lenders seven years to reduce bad loans by 60 percent, longer than earlier expected. ``The government is just delaying the problem of banks' bad loans longer and longer,'' said Makoto Suzuki, who helps manage $125 million in Japanese equities at Chuo Mitsui Asset Management Co. Bank of Japan Governor Masaru Hayami also urged the government to do more to fix the economy. Even though the central bank has pared interest rates to zero and expanded the supply of money, banks aren't lending as they try to clear bad loans, Hayami said. ``Under these circumstances, there is a limit to what monetary policy can achieve,'' he said. ``Monetary policy can become effective only if the government promotes its structural reforms.'' Analysts said investors shouldn't hope for a quick fix. ``Things aren't going to be resolved overnight,'' said Grace Chen, Asia economist at Royal Bank of Scotland in London. ``There's lots of wheels that have to work together.'' UNQUOTE