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

To: goldsnow who wrote (7491)	1/6/1999 7:24:00 PM
From: goldsnow	Respond to of 10921

Business: The Company File UK chip plant under threat The LG plant in Newport may never go into production The fate of the one the biggest investment projects in the UK has been jeopardised by attempts at economic reform in Korea. The £1.2bn semi-conductor plant was being built by Korean electronics giant LG in Newport, South Wales. But now it has been forced to merge its semi-conductor operations with rival Hyundai, which was also building a new semi-conductor factory in Scotland. It is very unlikely that both plants will go into production. Under the terms of the deal imposed by the Korean government, LG has agreed to hand over control of its entire semi-conductor business to Hyundai, creating the world's largest computer memory chip manufacturer. The industry is facing substantial over-capacity and the price of memory chips has tumbled. Fujitsu and Siemens have also announced plant closures in the UK. Bitter dispute The merger plan is the centrepiece of the Korean government's hopes for reforming the economy. It has been urging its biggest companies - which the Koreans refer to as the chaebols - to swap assets in order to to reduce their debts and consolidate their business interests. The over-expansion of the chaebols, financed by overseas borrowing, was one of the main causes of the Korean economic crisis. As part of the deal, Daewoo has taken over Samsung's fledging car business in return for acquiring some electronics plants. But LG balked at the last minute at giving up its prestigious semi-conductor business, threatening to upset the whole process of reform. The government in turn, moved to block any further loans to LG Semicon. On Wednesday, LG chairman Koo Bon-moo issued a statement conceding defeat after meeting with Korea's president Kim Dae-jung. "LG decided that the issue of the semi-conductor merger should not pose as a stumbling block to the nation's corporate restructuring," it said. Hopes for foreign investment The new semi-conductor company would be capable of producing more than 3m DRAM chips a year, overtaking Korea's other chip maker, Samsung, which has 18% of the world market. But it would also be saddled with $9.5bn (11 trillion won) in debts, including 4.5 trillon won from LG Semicon. The company said it was hoping to attract $1.5bn in foreign equity. The company said there would be no mass layoffs, but one or two lines would be closed "if the market situation gets worse." The takeover would maximize resources for research on next generation micro-chips. Moodys, the US ratings agency, has nevertheless kept Hyundai's debt on review for possible downgrade, saying that the delay in reaching a deal and the financial penalties imposed by the government could delay "the effective integration of operations." news.bbc.co.uk

To: goldsnow who wrote (7491)	1/6/1999 7:39:00 PM
From: Ramsey Su	Read Replies (2) \| Respond to of 10921

goldsnow, I don't have time to dig up old material. The bloomberg article is not remotely close to reality. Last qtr/yr when the yen was over 140 to the US$, companies like Canon, Toyota, NEC all reported a huge chunk of their earnings were attributable to the exchange rate. The dollar is commanding around 112 yen today, almost 30% off its peak. The Japanese multi-nationals are going to be killed this quarter, just on the exchange alone. For trading with US and to a lesser extent, Europe, business has to have improved 30% just to keep pace with the weakened dollar. Ramsey