JTS- "A Nordic Drive in Every PC and laptop" Message Board

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Microcap & Penny Stocks : JTS- "A Nordic Drive in Every PC and laptop"

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To: Crossy who wrote (1262)	9/15/1997 2:42:00 AM
From: chris431	of 1985

I have followed this thread for ~ 1 month (and read back postings) and am not invested in JTS but am interested in the company as a potential investment. I have a question/comment that I think should be of interest to those in JTS (then, again, maybe it should not be depending upon ones view of the affect of exchange rates on competitive behaviors). As we all probably know, Thailand's currency has has fallen dramatically against the dollar. How does this apply to JTS? While I am no pro in discussing money markets or the detailed impacts of currency swings on multinationals I do have some knowledge (so if others have more extensive knowledge on the issue I would greatly appreciate comments on this post). The impact on the exchange rate is primarily important to JTS b/c of its competitors production facilities located in Thailand while JTS's is primarily in India (which may have potential exchange problems but as I last recall they were trying to fight it off....then again with so many currencies in turmoil I may be incorrect about India's currency). Taken from Business Week's (Sept. 1) article "For Whom the Baht is a Bonanza" (pgs. 48-49)I found these statements: -"In disk drives alone, Fujitsue Ltd. in May announced a $250 million plan to boost output by 60%, to 1.3 millin units per month, while Seagate Technolgoy Inc. is spending $17 million to expand production of hard-drive components." The expansion will open "by yearend" although final assembly is in Singapore and Malaysia. -IBM has built a $300 million hard-drive plant in Thailand. The dropping of the baht has allowed "slashing production costs for IBM, which already is shipping from the site." -"Seagate Technology is expanding hard-drive assemblies in Nakhon Ratchasima Province, raising its workforce to 50,000" -In regards to the workers hand assembling hard drives, they earn "minimum daily wage of around $4." -"The currentices of....Malaysia....also are tumbling." Some of the above information is probably already known by most in this thread but I think the currency aspect is quite important. I think these quotations sum up where my thoughts are heading. With a new added advantage over costs of production of JTS's competitors (b/c of the fallen baht) JTS's margins will be pushed even further (Does anyone know the likely daily wages of workers in India for such semi-skilled manufacturing work?). And, if JTS still has costs of production advantages over its competitors, the fallen baht still reduces any such advantage as well as enables JTS's competitors to further use price war tactics in competition. Furthermore, the increased capacity also does not bode well for a company thats not entrenched in the market place. Constructive comments welcome. Christopher Hinton

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