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Technology Stocks : SmartFlex Systems (SFLX) - Blitzkrieg or Sitzkrieg?
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To: jsabelko who wrote (770)3/18/1999 4:44:00 PM
From: kolo55  Read Replies (1) of 848
 
I had the same question almost a year ago.

And it really worried me. It seemed that all the flex assemblers were losing market share. The question is why?

I think part of it is due to slow growth in the high end drives coupled with strong pricing pressure for assemblies. This is exacerbated by the new capacity suppliers like Smartflex and Adflex built in Asia... the new Adflex expansion in Thailand is ramping as I write. Remember, the smaller consumer drives don't have expensive flex assemblies, so growth in the consumer and desktop markets doesn't translate to increased flex assembly revenues.

Then I thought there was a significant chance that Innovex and Hutchinson were going to obsolete existing flex assemblies. I still don't if this is happening or not.

But then came Smartflex's deal with IBM. If IBM, the most technically advanced of all the HDD manufacturers was making a deal with Smartflex, it went a long toward dispelling concerns that Smartflex was assembling obsolete products... It doesn't seem logical.

So now I'm confused again... who is taking the market share?

BTW, if there will still be a large market for HDD assemblies in the years ahead, I wonder if Adflex's financial difficulties force retrenchment or bankruptcy, and then pricing in the sector improves.
Well... this is just conjecture.

Paul
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