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To: John Rieman who wrote (27701)	1/7/1998 4:35:00 PM
From: DiViT	Respond to of 50808

ELECTRONICS: EVERYONE'S TRUMP CARD... 01/09/98 AsiaWeek Copyright 1998 Asiaweek Limited If there is a bright spot, this is it. The global electronics and computer market is forecast to grow 17% in 1998, maintaining the pace of the last two years despite the turmoil in Asia. The region is a key supplier to the world. Everyone from the giants in Japan to the hustling memory chip, monitor and disk drive makers of Korea, Taiwan and Malaysia will be relied on to lead an export-driven recovery, especially since weak Asian currencies have boosted their price competitiveness. The trouble is, they all invested in capacity expecting the over-20% growth rates of the early 1990s to return, so expect price cuts. The weaker yen has already helped Japan's Toshiba boost exports. Currency fluctuations added $245 million to its April-September profit. But the grass is not much greener overseas. "Price competition is fierce in the U.S. PC market now that $1,000 models have made their debut," says Wada Kozo, Toshiba's senior vice president. "The Southeast Asian market is also expected to stagnate in the January-March period of 1998." Another downside to intensifying exports is that it could re-ignite the old trade dispute between Japan and the U.S. The picture is bleaker outside the computer arena. Not only are factories in China, Malaysia and elsewhere making more TVs and VCRs that customers want to buy, the consumer electronics segment hasn't had a big hit since CD players wiped out record turntables. Christmas 1997 was supposed to be the year for the DVD (digital video, or versatile, disc), the high-capacity disc format that could eventually replace video tapes, CDs and CD-ROMs, but that has not happened largely due to the lack of software. Now analysts are saying it may not happen until 2000 to 2003, depending on the market. Toshiba, which launched its first DVD player in November 1996, will try pushing from the other side of the market by investing in Japan's largest video/CD rental chain, which will start renting DVD software. Wada is optimistic about the future. "Sales have been growing at a far faster pace than (for) existing media such as LD players or CD players," he says. "We expect an attractive multimedia market, steadily growing in tandem with the ongoing development of digital technology." Not right away, though. The company sees consolidated sales growing a mere 1% and profit to drop 11% in the year ending March 1998. - By Sangwon Suh and Murakami Mutsuko/Tokyo