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Strategies & Market Trends : Electronic Contract Manufacture (ECM) Sector
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To: Sam who wrote (2495)3/11/2001 3:01:58 PM
From: rich evans  Read Replies (3) of 2542
 
Sam , with respect to:
When you say, "The projections by each company for each company were as if they were the only ones out there so the demand projections were greatly exagerated", it seems pretty naive of the managements of the companies, if true.

I got that from Susan Wang of SLR who indicated that this is what they saw happening and tried to adjust but still got caught with way to much inventory(parts) when orders were subsequently pushed out or cancelled and now there seems to be argument as to who should pay for these inventroy costs.
As to employment, I would agree it is definitely , at least always has been a lagging indicator and AG better act now as well as Congress.

Patroller still exists, At least he has appearend over at Yahoo. But generally it seems the ECM crowd at SI has moved on. I believe as Marks has stated and also Jim Savage, that this slowdown etc will prove to be very goood in the long run for the ECMs giving them time and incentive to get their houses in order, from a operational management,plants,software standpoint and will accelerate outsourcing and their growth. The question for me is how much of the 800 bill electronics industry can we realistly expect to be outsourced eventually. Right now the estimates are that 100 bill is outsourced. So are we looking at 50% of the electronics industry or more or what? When we start reaching those limits , then growth will approximate the growth in the industry itself and would expect the valuation paramentors to decrease for the ECMs like they have recently assuming they double and go back up after this slowdown to where they were.
Rich
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