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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets! -- Ignore unavailable to you. Want to Upgrade?

To: Sam Citron who wrote (3015)	10/24/1997 4:44:00 PM
From: Rob-Chemist	Read Replies (3) \| Respond to of 10921

In terms of the dollar strength, I think that it's effects on the semi equip manufacturers (vis a vis TEL, Hitachi, etc. vs. AMAT, LRCX, etc.), if any, should already be visible. The value of the dollar vs. yen has not changed much the last 4 months or so (115-125 yen/dollar). Over the last year or so, I believe that the yen has only decreased in value by 5-10%. The apparent lack of significant market share gains by TEL, Hitachi, etc. suggests that the technologies of AMAT, LRCX etc. are sufficient to continue winning orders. I think the greater impact, and which has been stated by other participants here, is the decreased value of the other SE Asia currencies relative to the dollar. This will make both the US and Japanese products more expensive. The question then becomes will this increased cost decrease the willingness of SE Asia semi manufacturers to invest in new Fabs. The primary factors favoring a decrease in Fab expansion are the increased cost and the possibility that the currency devaluation would significantly slow the local economy. It should be noted that this latter factor is significant only if the products of the Fab are primarily for local consumption. Factors favoring no change in Fab expansion include that large amounts of the capital for _some_ Fabs are coming from US/Japanese semi manufacturers, whose currencies haven't been affected by the "currency crisis", much of the production of _some_ Fabs may be designated for export to US, Japan, etc., and labor costs will now be lower relative to other parts of the world. (However, I am not certain about the significance of labor costs relative to the final cost of the chip.)