Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: ForYourEyesOnly who wrote (4391)	1/13/1998 9:21:00 PM
From: Jay M. Harris	Respond to of 10921

THC, every incremental decline of 5 yen to the US dollar shaves 1% point of growth off global semiconductor sales. We are at 130 yen to the Greenback and rising! The article that follows is not even included in the formula above. ************************************************************** Korean Crisis To Accelerate DRAM Price Plunge (01/08/98; 5:36 p.m. EST) By J. Robert Lineback , Semiconductor Business News South Korea's monetary meltdown will most likely fuel more steep cuts in DRAM and memory pricing in early 1998 because Korean suppliers now have a "cost holiday" resulting from currency devaluations against the U.S. dollar, said analysts during the annual Industry Strategy Symposium here this week. "About 55 percent of the DRAM manufacturing costs [in Korea] are won-sensitive," said analyst Clark J. Fuhs, director of Dataquest's semiconductor equipment, manufacturing, and materials program, based in San Jose. "The result is they can cut prices and still maintain a 'profit margin,'" he added, referring to the ability to skirt anti-dumping measures in the U.S. and European markets. That will be bad news for DRAM suppliers based outside of Korea, which have struggled with sharp price drops in 1996 and 1997. There is now a strong possibility that average selling prices for memories will drop an unprecedented third year in a row, said analyst Bill McClean, president of IC Insights of Scottsdale, Ariz. He told executives attending the conference that too much production capacity sent average DRAM prices down 60 percent in 1997 after a 65 percent drop in 1996. Nearly all financial and market analysts speaking at the conference said they now anticipate the DRAM market -- now totaling about $20-22 billion -- to remain in an oversupply condition until the first quarter of 1999. If so, worldwide DRAM revenues will be eroded and total semiconductor sales will most likely fall short of high-end growth estimates in the 17 percent to 20 percent range in 1998. All of those forecasts are based on a recovery in DRAM pricing. "For every dollar in the average selling price of DRAMs, total semiconductor revenues will rise or fall by four percentage points," McClean noted at the annual conference, hosted by the Semiconductor Equipment and Materials International (SEMI) trade group. Dataquest's Fuhs said Korean suppliers will be motivated to cut memory prices because they desperately need U.S. dollars to pay off loans and they want to maintain market share during the financial crisis. "The profitability of non-Korean suppliers will suffer," he added. But with the loss of profits in 1998, stalwart memory merchants might finally see light at the end of the DRAM recession tunnel. Industry executives and market observers believe a couple of major DRAM suppliers will opt to exit the market in 1998, if no recovery becomes apparent this year. <Picture: TW> Stock Lookup ÿÿÿ Search Archives ÿÿÿ