To: techtonicbull who wrote (666 ) 9/13/2000 2:45:30 PM From: SJS Read Replies (3) | Respond to WOW......glowing endorsement!word is that passive components such as tantalum and ceramic capacitors are now seeing greater demand than supply. In industries like electronic components, the supply/demand ratio is in constant flux, demand outpaces supply, companies scramble to increase capacity, and eventually a supply glut results. It appears that capacitor demand is outstripping supply in the current environment, which should come as no surprise given the growth of the wireless communications market. Tantalum is a rare metal, and therefore is subject to its own supply constraints. To decrease reliance on tantalum, capacitor manufacturers have developed ceramic alternatives that plug right in to replace tantalum capacitors. Still, manufacturing lead times are often four to six months for the products, making the demand forecast a tricky proposition. As such, we recommend you keep your finger on the trigger and watch such investments closely, but the current demand imbalance looks to be working in favor of the capacitor makers. The following publicly traded companies manufacture both tantalum and ceramic capacitors: AVX (AVX), Kemet (KEM) and Vishay (VSH). All three of those companies are trading well off their 52-week highs and (barring KEM) have underperformed the NASDAQ over the past three months. In July, Sony (SNE) and Agilent (A) both explicitly blamed capacitor shortages for production constraints, and numerous others have simply referred to component shortage limitations. There is always a way to profit off others' difficulties and capacitor manufacturers could be the winners in this case. - Matt Gould, Briefing.com
