Electronic Contract Manufacture (ECM) Sector Message Board

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Strategies & Market Trends : Electronic Contract Manufacture (ECM) Sector

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To: rich evans who wrote (2147)	10/23/1999 9:47:00 PM
From: MGV	Read Replies (1) of 2542

The BHE situation makes a strong case for sticking with the top tier names in the sector: 1. FLEX 2. CLS 3. SANM 4. JBL 5. SLR (in order of my favorites). Size and scale matter in the sector - you need global presence and you need leverage in relationships with component part suppliers. BHE said that one of the problems was Taiwan. They said they had received some defective parts. If you are Taiwan semiconductor and you are experiencing some production shortfalls because of the earthquake, who do you make sure gets the top line production? The top five are growing like gangbusters and they are benefitting from their scale to obtain value that the 2nd tiers cannot obtain. Its more than just a relative valuation story - it is competitive advantage.

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