bull market reasoning (corrected)

Michael Perelman michael at ecst.csuchico.edu
Tue Feb 22 07:00:58 PST 2000


Don't forget that many of the US companies produce their chips in Taiwan.

Dennis R Redmond wrote:


> 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

-- Michael Perelman Economics Department California State University Chico, CA 95929

Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu



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