is there any indication in the Korean press which would confirm or refute any claims of a manufacturing slowdown
Found this from "Fleck's Column" (Fleckensteins Contrarian - FWIW ?) ...not to do with manufacturing, but with new subs.... so this is not necessarily as "important" ... but, if true, is still news to think about.
I'm not so concerned about his opinion of an upcoming disaster in wireless companies stock prices (LOL), but this report (didn't hear it anywhere myself ... anyone hear it), if true, might explain some of the weakness in other component stocks this week: RFMD, TQNT, ANAD, etc. Although, this slowdown in sub growth is probably expected, and not considered a long term issue anyway - given the number of replacement phones bought in an ever maturing market like Korea ..... and ever expanding opportunities world-wide. (snippet from his column below)
-metman
link: siliconinvestor.com
Date: June 15, 2000
Title: Not-so-busy signals from Korean wireless market
paragraphs of interest
There was some potentially important news out of Asia last night --specifically Korea -- where the wireless market experienced historic "negative growth" in May of just over
212,000 subscribers. This is the first time that has happened since the late 1980s.
There are a variety of reasons why this occurred, not the least of which is the end of subsidies for cell phones. The Korean financial market itself was down last night about 6 percent.
Why does this matter to us, you ask? Because a potential debacle is shaping up in the cell phone and cell phone component market, similar to what we experienced in the PC and PC component market in late 1995 and early 1996. Back then, the build-up before the successful Windows 95 launch drove PC sales dramatically. However, in that instance we had more than enough parts stored up in advance.
We've got a similar situation with cell phones, where there is an expectation of tremendous growth, as I detailed last week, when in fact, growth may very well be slowing. Since many of the parts that go into cell phones are pure commodities -- capacitors, flash memory, etc. -- and since there is so much capacity being brought on and shortages exist (thereby creating double and triple ordering), the stage is set for a dramatic dislocation.
The other important reason why this potential exists is that the valuations of the companies that make these commodities (using not exactly leading-edge type technology, even in the case of analog and digital devices), are just so extraordinary, and all the momentum-oriented funds and those with performance own them. The Sox itself is still up about 60 percent this year.
Getting the picture. . . Yesterday, there was a rout in phone-oriented parts. Last night we got this information out of Korea, and today those same sorts of stocks were roughed up yet again. It's unusual these days to see the dots get connected. Lord knows, it never seems to happen in the PC world. In any case, the light bulb will go on one of these days, and the combination between those problems and the
problems already existing in PCs will open a trap door in the Sox. That will be the end of the performance, and may also act as a catalyst for a huge decline in the market.<i/>
(eom) |
