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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets! -- Ignore unavailable to you. Want to Upgrade?

To: Jurgis Bekepuris who wrote (4239)	12/30/1997 11:08:00 PM
From: Rob S.	Respond to of 10921

Nice post. In several of last quarters' conference calls for semi equip cos., they said that their Asian and other customers were pulling in some orders and that things looked strong in Asia altogether. At least that has been what their customers have been telling AMAT and others. What may be occuring is that several companies saw that they had loan commitments to build out certain facilities, they knew that if they didn't use the commitments while they still had them that the money would be much harder to get on a new or rolled-over commitment. Use it or lose it. Now that the rules of the game are quickly changing, the companies that must go back to negotiate roll-over on their huge debts (Samsung and others have outrageous degrees of debt (4X-8X D/E) compared to US or European companies). The banks are being forced to take a much harder stance on extended the debt - such tough questions as "how do you intend to pay it back within the next century based on real profits instead of pipe dreams?". It can be argued that the effected Asia countries are less than about 20% of worldwide capacity so even a 50% cut back in their expenditures won't change the basic growth equation. However, part of the required rationalization of the Asian economies is to allow their worst failing companies to go bankrupt or be bought into or bought out. What that could very posibly result in is that many US and European and other Asian semi manufacturers will be able to buy up fabs at auction sale prices - cheaper and quicker than they could build them from scratch. And they will gain fabs in countries with devalued currencies and low costs of manufacture now that their inflationary bubble has burst. I think it will take up to another couple of quarters before all is known about the depth of the Asian crisis and how it will effect worldwide semi equip plans.

To: Jurgis Bekepuris who wrote (4239)	12/31/1997 10:40:00 PM
From: Justa Werkenstiff	Respond to of 10921

Raimondas: Re: What happens after crisis passes? In 1996 the crisis passed when Jim said: "I see X bln revenues in 1997 and Y% percent growth". The companies suddenly dropped their poker tactics and rushed back to order. This may happen again. It's also possible that the downturn will last longer. Either visibility will not improve and companies will continue to play poker, or negative visibility will appear. In this case Jim may say: "I see X bln revenues in 1999 and Y% percent decline". That about sums it up. I'll just add that under your first scenario, if the visibility increases before or at the time push outs or cancellations are announced and that visibility reflects positive news, the stock prices should rise at that time or in anticipation of that occurrence. There is still a great debate in the industry today on whether this is a blip, an intermediate problem or a long term problem. One thing is for certain: there is a whole mess of deer (customers) staring into headlights this evening. If I only knew the answer.... I now hear that some customers are taking their sweet time in accepting systems so as to buy some time before having to make a payment. I imagine this can cause havoc to quarterly earnings reports. Is this called a back end push-out <g>?