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Technology Stocks : Cymer (CYMI) -- Ignore unavailable to you. Want to Upgrade?

To: C E D who wrote (12769)	1/16/1998 11:20:00 PM
From: Zeev Hed	Read Replies (5) \| Respond to of 25960

C.E.D. I think that one of the problems with the whole sector (semi-equip) is their exposure to East Asia. The assumptions promulgated by the "mavins" is that 1998 shipments will be greater than 1997. The November issue of Semiconductor International forecasts 1998 shipments of $30 Bill vs about $25 Bill in 1997. I think that these forecasts are rapidly coming down, but not yet to shipments that are less than 1997. People have not factored in yet declines in sales to the stronger sisters, such as Japan and Taiwan. The LDP has just floated a new baloon (responsible Thursday night for close to 1000 points advance on the Nikkei) of allowing Japanese financial institutions to revalue the real estates on their book and mark these to market, supposedly adding some 4 to 6 trillion yens to their assets (tax free) base. This step by itself is quite questionable, but considering the fact that Japan is the largest lender in the region with an exposure well in excess of $100 billions (or 13 trillion yens), this patch will do very little to stop the bleeding of financial institutions in Japan. Once the ability of these institutions to lend to the semi manufacturers in Japan is impaired, we will see reduction in deployment of equipment, simply because of shortage of financing. I would not be surprised that when the numbers are tallied up next year we find that semi equipment shipment in 1998 actually declined some 5% over 1997, and possibly much more. If that is what is going to happen (and we will know that within two three months as we observe the BTB for equimpment makers drop to .8 or so), then current valuations might still be viewed as rich. Zeev