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To: LLCF who wrote (722)	12/14/1997 10:30:00 PM
From: Mason Barge	Respond to of 1305

<<do your think the current dram crash could be short lived because the firms cutting prices are doing so looking at local currencies >> I don't know. However, part of the IMF conditions on the Korea bailout is refusal to make these kind of loans. The weak players are just going to have to be run out of business before the sector can be profitable long-term, and as long as Asian banks are willing to lend money to clearly over-capitalized industries, there's going to be DRAM excess capacity. But you'd have to think that the Asian way of doing business is going to get some modification after this (although the Japanese appear to be fighting change). So you'd have to think that the problem is going to ameliorate somewhat, ie, fewer banks willing to make loans to yet another chip fab, especially DRAM fabs. This shakeout would be good for the chip companies in the long run but would have to hurt the semi equipment industry at least to some degree.

To: LLCF who wrote (722)	12/15/1997 7:55:00 AM
From: Mason Barge	Read Replies (1) \| Respond to of 1305

Two interesting perspectives on the Asian situation: First, from a long Dow Jones article this morning: <<The worst situation is to be heavily dependent on Asian markets, but make products in the U.S. or, even worse, high-cost Europe. For such companies, the Asian turmoil is a resounding negative. Chief among them are suppliers of the equipment used to make semiconductors, a $28 billion industry dominated by U.S. suppliers like Applied Materials Inc. and LAM Research Corp. The market leader, Applied Materials, gets about 10% of its revenue from South Korean chip makers and up to 25% from Japanese manufacturers. The downturns in Asia have hammered the shares of the equipment makers' stock. Analysts say the chip-equipment sector is one case where the market isn't overreacting. >> <<The main driver of the U.S. technology boom has been the huge PC industry. International Data Corp., a market-research firm, expects the Asian crisis to shave 1.3 percentage points off 1997 PC unit-shipment growth, to an estimated 14.2%, and about 1.4 percentage points in 1998, to about 13.5%. Dataquest, another research firm, is making similar forecasts. >> Second, today's interview on IBD: aol://4344:504.p1ac57kq.517324.566448056