bull market reasoning (corrected)

Dennis R Redmond dredmond at oregon.uoregon.edu
Tue Feb 22 01:22:32 PST 2000


On Mon, 21 Feb 2000, Rakesh Bhandari wrote:


> As I noted 9/9/99:
>
> Again the paradigmatic case was the loss of US technological leadership in
> DRAMs. But it turned out that US firms were strengthening themselves by buying
> from least cost foreign sources. Frederick Scherer makes 3 interesting
> points: US firms did not need the experience of meeting the demanding
> fabrication tolerances from basic memory chip production to master the
> techniques for making more complex application specific and microprocessor
> chips. The US dominates design and production of microprocessors whose
> tolerances are at least as stringent as those of DRAMS.

Oh, really? Dataquest lists the top 10 global chip producers in 1999, in billions of US$, as follows:

Firm 1999 sales % growth Intel 25.81 13.3 NEC 9.22 12 Toshiba 7.59 28.4 Samsung 7.10 49.5 Texas Instruments 7.10 22 Motorola 6.43 -9.4 Hitachi 5.52 18.3 STM 5.08 21 Philips 5.07 13.9 Infineon 5.01 28.2

Out of the top ten, US firms hold 47% market share, East Asian firms hold 35%, and EU firms hold a surprisingly large 18% (a dramatic turnaround from the early Nineties, when the Euro chip biz was on the rocks). This just isn't a picture of uncompromised US hegemony; note the absence of IBM, which used to lead the pack here.

-- Dennis



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