On Sun, 21 Mar 1999, Rob Schaap wrote: > And how is Japan's billion-dollar pump-prime beginning to look to you lot? Well, check out this recent article in Semiconductor News, by Anthony Cataldo <http://www.eetimes.com/story/OEG19990311S0055>, dated March 11, 1999: ------------------ "Intel has made investment proposals to several DRAM suppliers in Japan, including Toshiba, NEC and Mitsubishi. Industry sources here refer to the investment pool as the Intel Monetary Fund. And just as the International Monetary Fund lends money to recession-plagued countries that follow a strict set of guidelines, Intel is promising a windfall to those companies in Japan that are willing to play by its rules. Indeed, concern about how far Intel may seek to stretch its reach across the Pacific could be behind the lack of agreements with Japanese companies thus far, observers said. "Although Mitsubishi Electric was approached by Intel with regard to possible financing measures for production-related investments, we declined [because we] are able to achieve our current production plan with our present capital-investment levels. No decisions have been made regarding the possibility of entering such arrangements in the future," Koichi Nagasawa, general manager of Mitsubishi Electric's Semiconductor Group, said in a prepared statement. "It can be quite dangerous for a company like Toshiba or NEC to allow Intel to be a shareholder," said Rick Oyama, an analyst with ABN Ambro [sic] Securities. "They need the money, but they don't want to give political power to a big U.S. company like Intel." ------------------- Like most press releases, you have to read between the lines carefully. First of all, the US is *not* a threat to the Japanese in DRAMs, the Koreans are. Second, a big Eurobank, ABN Amro (Dutch), gets quoted as saying this is just fine with them. The Nippomultis know that the EU banks are loaning all kinds of money to SE Asia, including their competitors,but figure they can cooperate with them easier, thanks to their keiretsu structure, than dealing with the rapacious Americans. Finally, note the astonishing eloquence of that single line: "we are able to achieve our current production plan with our present capital-investment levels". Mitsubishi Electric can call upon the resources of BTM's $700 billion balance-sheet, of course, and the other electromultis are similarly well-protected. My conclusion is that the Japanese recession has bottomed out, that an upturn is on the way, and that the Nippomultis are gearing up to get into the microprocessor market. This would explain the recent surge in the Nikkei, too -- Japanese capital is regaining its confidence. -- Dennis
