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Technology Stocks : Bookham Technology -- Ignore unavailable to you. Want to Upgrade?

To: Mahatmabenfoo who wrote (242)	10/9/2002 2:05:14 PM
From: OWN STOCK	Read Replies (1) \| Respond to of 376

Charles: The concept of last one standing seems to be the motivation. Not a sound economic justification. It is the inverse of the bubble consolidation justification, and no more. And we know where we got with that one. I don't know about you, but I lost a hell of a lot of money in the JDSU/SDL deal. Reduced competition is the theory, and it is just not going to happen by consolidation. JDSU is not going away. Evaporation (bankruptcy) does reduce competition, but new companies start every day, even now. Lets' talk structure. Semiconductor market is 99% horizonatal layers...why? Because the field is so diverse...even though it is 90% Silicon. I mean there are Silicon wafer companies, foundries, ion implanters, packagers, testers, stampers, you name it. It's a freakin' 1000 layer cake, and it is efficient due to intense competition within each layer. In optics, the materials range from GaAs to InP to LiNbO3 to SiO2 to you name it. Passives to actives. No one company can posssibly be good at all that, just from a technical viewpoint. The next problem is not only are the materials different, but the markets for them are different, ranging from telecom to biomedical to industrial. No one company can be good in all those markets. The product of those two basic facts spreads things out so much there is no benefit to consolidation at all, especially in optics. In fact, any savings you might have in overhead is wasted trying to communicate or coordinate. The different materials keep you from consolidatiing operations. The differnet products and markets keep you from consolidating sales and marketing. Engineering has its specialists. The list goes on and on. Optics should be a 2000 layer cake, but it is not there yet. Let's take the NT purchase/merger to get specific. BKHM should buy NT (or whatever) on the basis of getting a sustainable competitive edge, meaning: margin growth. If NT could not make margin on HPOC, BKHM can't either. This is just a phony stock lubricated sales deal, at the bottom line. JMHO