Not asked because it is an easy question to answer. Production shuts down stock goes to less than 25 cents. JARE and Lynas board has to decide what to do next. Probably work hard on renewal and relocation in parallel. My reading of the situations probability is less than 1% chance. Two many people including all the US and EU community and Malaysia have too much to lose. People forget how dependent Malaysia, for the last 40 years, depends on doing assembly for others. The US IC industry has many plants in Malaysia and has been doing assembly there for over 40 years. Same with auto sub assembly, many other examples as well. The reason most people in the country speak English and are well educated is its very long history of high level assembly for others. The lamp in yearly $ is small compared to other foreign investment. A physically small (500,000 SQ FT 50,000 sq Meters) IC plant can put out over USD billion in product a year. The influence of this can be used to put great pressure on Malaysia. Many of these buildings are physically old. The equipment in them has a life span of only a few years before Technology says they need to be upgraded or replaced. Much easier to pull a few of these and relocate to another country than the Lamp.
I also find it interesting that many IC plants left US because of expensive environmental regulations. The chemicals use in this industry are far more dangerous than Lynas radiation. That is ignored.
LYC Price at posting:
$2.36 Sentiment: None Disclosure: Not Held
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