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To: Hightechhooper who wrote (13506)	7/13/1998 1:49:00 AM
From: Jock Hutchinson	Read Replies (1) \| Respond to of 25814

Just as the AMAT news really is a good thing for the semi industry, so are the results of the Japaneese elections. K: That's as silly as it gets. How can you possibly reconcile the emergence of the Communist Party in Japan with the near-term reemergence of the Japanese economy. cnn.com Moreover, in the short-term, it is clear that the LDP will continue to rule. The long term perspective is that we will continue to see Japanese disinvestment in upper level chip industry leading to American hegonomy in non-DRAM chips. Another long-term probability is the flight of Japanese capital at the family level into the American stock market--a reality that only became allowed by Japanese law on April 1, 1998. Over time the results of the election suggest an exacerbation of the boom cycle for the next ride up in chips because of the lack of investment as evidenced by AMAT's problems, which in turn reflect the problems in SEA. Indeed, if the problems continue over a protracted period of time, the boom period for high quality American chip companies could be unparalleled given the most likely scenario of ultimate renewed demand in SEA without the attendant increase in SEA chip production capacity.