Bangkok--4 Sep--Moody's Moody's Investors Service has a negative rating outlook for Asia Pacific's technology and semiconductor sectors over the next 12-18 months. "This outlook reflects mainly the pressures apparent on profitability due to the severer-than-normal downturn in prices for digital random access memory (DRAM) chips and NAND flash memory," says Ken Chan, a Moody's VP/Senior Analyst. "Specifically, profitability for the foundries as well as the outsourced semiconductor assembly and testing (OSAT) sectors is being undermined by lower average selling prices, foreign-exchange volatility, and higher costs for raw materials and utilities," says Chan. Chan's remarks coincided with the release of a new Moody's report -- which he and Wonnie Chan, a Moody's Analyst, co-authored -- on the outlook for the technology and semiconductor sectors in Asia Pacific (ex-Japan). The report specifically looks at key trends for the sectors and their rating implications. "Moreover, the medium-term outlook for the industry is at best mixed, and Moody's does not foresee any meaningful recovery until well into 2009, given current and projected oversupply and price weakness," says Chan. "A crucial problem is over-supply as -- to win market share -- Samsung Electronics, in DRAM and LCDs, and LG Electronics, in LCDs, are continuing to expand capacity," adds Chu. "Liquidity is another factor behind the negative outlook with the 8 rated technology and semi-conductor companies showing a mix in their liquidity profiles, including 3 with weak liquidity," says Chu. "In addition, the macro-economic outlook is hardly supportive," says Chu. "The Asian technology and semiconductor sectors have still not yet felt the full impact of the economic slowdown in the US, Europe and Japan because so far the weakness in the Korean won has - for some - bolstered trade," says Chu. "And finally, while many companies have repositioned their exports to focus on higher-growth Asian and Middle Eastern countries, the benefits could be limited as sales to such regions tend to involve low- and ultra-low-priced components," says Chu. The report, entitled "Asia-Pacific Technology and Semiconductor Sectors Emergence from a Cyclical Trough", is available at www.moodys.com. Hong Kong Ken Chan Vice President - Senior Analyst Corporate Finance Group Moody's Asia Pacific Ltd. JOURNALISTS: (852) 2916-1150 SUBSCRIBERS: (852) 3551-3077 Hong Kong Gary Lau Senior Vice President Corporate Finance Group Moody's Asia Pacific Ltd. JOURNALISTS: (852) 2916-1150 SUBSCRIBERS: (852) 3551-3077