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Technology Stocks : MRV Communications (MRVC) opinions? -- Ignore unavailable to you. Want to Upgrade?

To: Mike Winn who wrote (6360)	12/12/1997 6:47:00 PM
From: Dan Spillane	Read Replies (2) \| Respond to of 42804

To answer a few of those questions... In the short term, of course could be competitiive damage that US semi cos will take due to dramatic relative changes in currency. However, from my study of the Asian news, there are much deeper problems the Korean economy has to deal with. Basically, much of the NON-US semi fab build-up was based on loans taken by Asian conglomerates. These conglomerates are huge, and bankrupt (some have 5 to 1 debt to equity ratios). In fact, funny you mention Samsung, because I think they may be part of some conglomerate...and, if I am not mistaken Samsung is one of the companies which has had recent debt downgrades -- that is what caught my notice! How are Samsung and others going to borrow money in such an environment? Further, with the severe devaluation of the won, everything IS NOT rosy. Korean semi cos must deal with the local breakdown of logistics...and how can they afford certain items in the world market needed to produce product, including fabs and raw materials? Yep, logistics are breaking down. Suppliers and distributors in Korea are going bankrupt. When this happens, the US semi industry will have a chance to take away market from Korea. Yes, perhaps even world shortages -- which only US companies can fill -- if things go downhill in Korea. Out of the bigger changes in the world economy, there are big benefits here for some US companies. That is, there is aready evidence of sizable drops in oil, steel prices, ag prices, DRAM prices, labor costs. In fact, some companies are RUSHING into certain Asian countries...and, many US-based companies may already have production in these countries. So, they'll shift more production there. Could even increase US unemployment in a few areas. As you guys know, I called the earlier 97 bear market pretty well. Check back in this folder for my comments on the inflation/tech slowdown scare then. Dan