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Technology Stocks : Cymer (CYMI) -- Ignore unavailable to you. Want to Upgrade?

To: Elroy Jetson who wrote (9896)	11/17/1997 3:14:00 AM
From: Jess Beltz	Respond to of 25960

Elroy, we need to think about the situation in Asia. (1) I do not know the extent to which Asian chip manufacturers are debt laden and therefore unable to take on further debt to fund expansion/retooling, or (2) The extent to which there will be bank failures and/or a credit crunch that limits the availability of debt funds for such uses. My information suggests that there may be a credit crunch due to the extremely high existing level of nonperforming loans in both Japan and Korea (over 10%.) This does not mean, however, that no loans will be made, and it seems that in times past, the semiconductor segments of the economy have been stellar performers in this part of the world. Carl Johnson makes a pretty convincing case in Infrastructure that the semi industry is an all-or-nothing big stakes poker game, and when the stakes get raised, the players at the table have no choice but to ante up. I began an investigation of the debt ratios of semi firms today, but the Moody's data I have is just too old to be meaningful. I can tell you however that the debt ratios of Japanese and Korean firms are higher than their Western counterparts. I would say the way to think of the problems here is the following: The push to retool to the .25 micron and under dimension sizes may be out of reach for a few Asian firms, and may take a bit longer for some of the others, so that demand from Asian chip manufacturers may be somewhat less and more stretched out than it otherwise would have been. However, they cannot stay out of the race as a group without rendering themselves quickly obsolete (and Johnson's point is that this fact remains regardless of how much existing DRAM they dump on the market, and how cheap that DRAM becomes.) If worse comes to worse, they will I expect lobby their governments with this very point, and get help there. I think, however, that the retooling in the West will take place apace, as is evidenced by ASML's order backlog, which now extends out to the end (I believe) of 1999. Also, I checked the balance sheets of both Nikon and Canon, and they have solid balance sheets with good debt ratios. The fact that the Japanese banking sector has to write off billions in bad loans in the next two quarters does not mean that there will be no more debt market in Japan. For what its worth, I think that the final wild card in the melodrama here is whether or not there will be a large scale bank panic here when the final level of the insolvency problem is understood by the public. My guess is that there won't be, but I become more cautious as the Nikeii reaches 14,000. In light of today's gain (1,200 points), that seems farther away, and I expect a killer rally on Wall Street today. The fact of the matter is that the severity of my mood on the problems here with respect to their influence on Wall street is lightening up. The market tanks on the release of NEW dismal information. I think about all of the information on the problems here is out (the revelations about the severity of the problems in Korea being about the last bit to fall into place.) more ramblings..... jess.

To: Elroy Jetson who wrote (9896)	11/17/1997 8:20:00 AM
From: orkrious	Respond to of 25960

Elroy, why is an advantage to Intel (if the Asian mfgrs end up on the low end) bad for Cymer. Doesn't Intel need machines that use CYMI's technology too? Jay