Electronic Contract Manufacture (ECM) Sector Message Board

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

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To: kolo55 who wrote (926)	12/11/1997 1:56:00 PM
From: jeffbas	Read Replies (2) of 2542

Paul, I am trying to understand why these stocks might be getting pummelled so badly (poor tech stock psychology aside), with Creditman still feeling good about the industry. I would appreciate your opinion on the following. Although one would think the Asian plants of many of these companies would be able to produce their products more cheaply, perhaps most of the output for these plants is for local markets. If demand dries up could these plants be underutilized? Next, could these plants be used instead to produce products for the domestic US market, or would shipping eat up the savings? If Asian plants could produce for domestic US, then the current busy conditions for US plants may not last. If they can't effectively cover the cost of transportation, then ECM's without Asian plants would seem to be better situated. I'd appreciate some help for this non-technical person with these questions.

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