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 (1089)	1/9/1998 11:17:00 AM
From: kolo55	Read Replies (2) of 2542

Bad market today- agree with your post pretty much. I just heard on CNBC that Adaptec's comments in their earnings warning have pushed the whole ECM sector down, and they mentioned Jabil, Sanmina, Micrel and Hadco declines. I didn't hear Adaptec comments, and wonder what the comments were. Adaptec primarily makes HDD controller chips if I recall, so seems that their comments would imply the hard drives sales are under pressure. I'll have to figure out what the rationale for punishing the ECM stocks is. We already knew that the HDD sector is getting hammered due to attempts by Fujitsu and Samsung to grab market share using scorched earth techniques (burn all the crops to the ground, and see who starves first). I wasn't too surprised to see Adaptec get hit, but I don't see the obvious connection to the ECM stocks. Maybe the market is assuming that Adeptec's comments mean that PC sales are collapsing, but I don't see any signs of that. Due to sub-zero PC sales growth, I believe PC unit sales are increasing nicely. Well, I'll go read about Adaptec's comments if I can find anything. Well- came back in time to edit my message-- Seems to me Adaptec was trying to convince the street that they are more than a disk drive industry player after they got hammered with the drive sector last month. But I think the root of their problem seems to be the drive sector problems- On Wednesday Seagate announced their revenues were going to be down significantly compared to a year ago. This has to be hitting Adaptec hard. But I am having a hard time seeing the connection to Hadco and Jabil. Why should Hadco get hammered down 4 points to roughly its 52 week low? Do they make boards for hard drives, and is this a significant part of their business? Paul Paul

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