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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: tom r. phillips who wrote (30010)	7/20/1998 11:41:00 AM
From: Knighty Tin	Respond to of 132070

Tom, Uh, Motorola and Texas Instruments. -g- Seriously, the question is, when a company goes out of business, does its capacity go out of the business? So far, that has been a negative. Motorola got out, but Siemens and AMAT are still operating the fab where MOT was a partner. TXN got out, but MU will not only operate its fabs, but probably greatly increase their capacity. Longer term, you have to look at the weak sisters to exit. The Japanese have cash out the wazoo, and I see few of them, with the possible exceptions of Fujitsu and Oki, who would even consider getting out. NEC, Hitachi, Mitsubishi, and Toshiba are all expanding big time into the next generation of DRAM and into systems on a chip. The Koreans are hurting, but they consider DRAM a major part of their economy and they are not getting out. The Taiwanese will probably see consolidation. There will be huge headlines as smaller, less competitive Taiwanese firms exit followed by a backpage sentence that Acer or Taiwan Semi have bought their fabs for pennies on the dollar. Just as investors have "learned" to buy stocks on the dips, chip cos. have learned to add capacity during the downturn so they will be the firm to make the most money during the next upcycle. Which, of course, means there will be no upcycle until somebody screams "uncle." The big Japanese cos. are financially able to do this forever. Ditto for the larger Taiwanese firms. The Koreans may not be able to do it on their own, but the IMF will help them. The weak cos, financially, should be the first to break. Micron is the one that looks most vulnerable. They don't sell a gazillion tv sets every year to keep their DRAM fabs humming. MB