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

To: Ramsey Su who wrote (4894)	2/20/1998 9:51:00 AM
From: Mason Barge	Read Replies (2) \| Respond to of 10921

<<On the semi side, are there Taiwan, US or European companies who can take advantage of weakness in Korea and Japan to shake loose their historical stronghold? >> I just did a long post on AOL/MF/KLAC about this. I think you have to consider the worst-case scenario in Asia. Eventually, it's impact on US semiconductor equipment shares is going to be almost nil. The only long-term negative effect of a long-term Asian collapse is a lessening in end-user chip demand. The semi companies themselves are simply going to be replaced by better businessmen, or by businesses in countries with a more mature business model. Just today, someone (I think Adaptec) bought a profitable $700MM electronic business in its entirety from Hyndai, at a discounted PE of 7, and IBM announced it's opening a MR head plant in China. In other words, the Hyundai plant is still going to be ordering equipment even though Hyundai is distressed, and someone in China is going to be ordering MR head equipment from, say, Helix. It's just that the companies doing the ordering are US rather than Asian. The big winners are, of course, the US chip companies picking up these bargains and/or markets while the Asians are paralyzed. However, the news is good for equipment fabs also. First, the equipment is going to be bought by someone. Second, much less significant but still a plus, is that there will be a tendency to see less competitive Japanese equipment companies losing their nationalistic edge. I doubt, for instance, that a non-Japanes company is going to have much interest in buying a DUV laser from Komatsu, so Cymer would benefit by maybe 5 or 10 units a year. I'm starting to think that, considering the huge amount of capital available to US companies at this point (baby boomers investing for retirement), that the Asian crisis is going to have less effect than a lot of us have assumed. 1) Distressed Asian companies are going to have to sell overseas assets, and the buyers are going to order capital equipment, 2) Asian countries that allow foreign investment are going to see a lot of American-European ownership, and 3) those that don't are going to recover or else go out of business. And it's happening faster than I, for one, would have anticipated. IC outfits in the US, Germany, Holland, and Taiwan are aggressive and greedy. They aren't about to ignore a chance to put the competition in the rear-view mirror. I'm 100% long now, just a question of picking the best ones. I got some KLIC yesterday and am going to hold it for a while.