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Technology Stocks : DII Group, Inc.
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To: jeffbas who wrote (1585)4/6/1998 11:55:00 AM
From: rich evans  Read Replies (1) of 1845
 
Yikes, DIIG is hitting a brick wall and the graffitti on it says ORBIT. They Paid 3.6 million shares presplit for this company which at the time in August 1966 was worth $12 a share which equals about 44 million and today the orbit shareholders have 7.2 million shares at $20 worth 145 million I figure. Diig then took a non recurring charges associated with the merger of 16.5 million according to their 10K. What did they get: an old fab with a few customers ( 60 million annual sales). The 4" fab had 1.2 micron cabability. So they then spent a lot of money to get a 6" fab at .6 micron. This was at a time when the industry was at 8" fabs and .35 micron and better. Now the industry is going to 12" fabs and down to .13 microns see:

semi.org

This is a good discussion on semi plans. Anyway now we have another 54 million writeoff which is basically the whole investment orginally and where do they go from here. They once again have an old tech 6" fab and as you pointed out have to outsource customer requirements. They can't keep up with the capital required to stay state of the art with the other SEmi-conductor ASIC companies IMO. This is a big problem in my opinion and could impact the company for awhile until they solve it. Would be interested in other opinions and what company can do.I am still long with my original shares but the puts I sold for October are looking like money in the bank for someone.

Rich
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