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Technology Stocks : MEMC INT'L. (WFR -NYSE) The Sleeping Giant? -- Ignore unavailable to you. Want to Upgrade?

To: Scotsman who wrote (2824)	12/24/1997 5:01:00 PM
From: olduvai5	Read Replies (1) \| Respond to of 4697

I've been taking a look at the situation vis-a-vis the Asian players in the wafer business, and it's beginning to become clear this situation is a net plus for WFR. Although demand may decline for wafers produced in the region, the cost of production in Taiwan and Korea, where WFR is concentrated, is being reduced dramatically. Wages in international terms are dropping like a rock. Where cost of living for basics (like food and housing) are remaining fairly flat, wage pressures will not be exacerbated by currency devaluation. Almost all their equipment is already in place and paid for. Local supplies and services - paid in local currency - are MUCH less expensive than just 6 months ago. Other capacity expansions not so far along are hobbled by the sudden doubling or even tripling of imported equipment. They can play this two ways. If they want to be heroes to their customers, they pass these savings along. Or they may take advantage of these cost reductions and export the wafers to markets in Europe and USA, where costs are much higher. It will be months before either strategy shows dividends, but it makes Zeev's $100 scenario quite a bit more realistic. Once a currency undergoes crushing devaluation, it takes a long time to come back. Merry and Happy Best Wishes To All, it's been an interesting year! Next year may prove to be even more interesting and, I hope, a lot more rewarding. I'll be offline for a couple of weeks - going to commune with the snow and rock in the Canadian Rockies. olduvai5