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To: Winston Chang who wrote (4054)	11/9/1997 10:53:00 PM
From: DJBEINO	Read Replies (2) \| Respond to of 7841

IBM to unveil disk-drive technology biz.yahoo.com

To: Winston Chang who wrote (4054)	11/9/1997 11:22:00 PM
From: Joe E.	Read Replies (1) \| Respond to of 7841

Winston: Re your explanation, ending with "At any rate, this should clarify the accounting taking place here." Indeed you have clarified this and I am very grateful.

To: Winston Chang who wrote (4054)	11/10/1997 1:46:00 AM
From: Gus	Read Replies (1) \| Respond to of 7841

Thanks, Winston. Also, SEG ended up spending only $800 million of their $1.0 billion capital budget for fiscal 97 and I am convinced that they are going to end up spending less than the $1.0 billion capital budget for fiscal 98 due to the fact that it makes sense to exploit the overcapacity conditions in the supply line for MR heads and platters. Also, the competitive devaluations going on in Southeast Asia should help the bottomline going forward because SEG has located its most labor-intensive factories in the hardest hit areas like Malaysia and Thailand. As a useful point of reference, IBM, whose earnings took a much larger currency hit, was prescient enough to spend $700 million in May in Thailand to build a disk drive component factory that takes advantage of the fact that Thailand has the lowest cost of labor in Southeast Asia largely due to the low level of educational attainment of its workforce. Bottomline: lower accelerated depreciation schedules and lower operating expenses (salaries, goods, services, etc). Regards, Gus