Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Larry Ames who wrote (9549)	10/25/1997 1:52:00 PM
From: John E. Rylander	Respond to of 70976

Larry, isn't that article talking about boosting US purchases of basic foreign-made (and therefore inexpensive) capital equipment such as telephony infrastructure, rather than talking about foreign purchases of US capital equipment? That said, it's not clear that the problems in SE Asia will significantly decrease the demand for chip equipment, since (1) everything in the business, from the machines to the end products, seems to be dollar-denominated, and (2) most of the stuff is for export anyway, not for sale to the hurting SE Asia region itself. But, as Cary and Dave will repeatedly and rightly point out, (a) there is still the current DRAM glut, and (b) while SE Asia consumers of SE-Asia-made chips are a small percentage of their overall consumption, it won't grow this coming year as expected/hoped, so unless these problems allow them to reduce their other costs and hence prices to stimulate demand elsewhere above prior expectations, there'll probably be -some- negative impact on SEMs, I'd imagine. [And this assumes semiconductor equip purchases are largely determined by worldwide chip demand and the need to reduce costs-per-bit, rather than by financing problems.] I sure wish AMAT management would comment on this. --John P. S. Larry, just after I sent this off, I realized that I was missing your point -- I think. The very thing that the article you referred to talked about -- increased US general capital expenditures -- is an instance of what I talked about above, that is, lower SE-Asia prices stimulating greater wordlwide demand, which in principle may/i> offset or more the declines in SE Asia demand. This was probably your whole point. I didn't mean to condescend; I just missed it initially! I hope this explanation will nonetheless be a useful gloss for novice followers of this area. (And something similar will happen with DRAM eventually.) Thanks for the article.