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To: Teknvstr who wrote (608)	12/15/1997 7:06:00 PM
From: Dave Hanson	Respond to of 886

Thanks for the info, Tek. Very much appreciate your passing it on. (And thanks Gerald for the moral support.) :) Interesting to see what happens tomorrow, now that the bigger-caps seem to be firming up. Were I more experienced/confident, I might double up soon. Best, Dave

To: Teknvstr who wrote (608)	12/16/1997 9:32:00 AM
From: Leeza Rodriguez	Read Replies (1) \| Respond to of 886

Tek, I spoke with Mr. Baumann yesterday also. It seems as though we had the exact same conversation. Bottom line is that this Asian scenerio may just be a NET wash for many companies. Any decrease in revenue could easily be offset by lower operating expenses in their Asian facilities. As you noted, some companies (like Compaq- a smtc customer) could actually realize NET positives due to the bulk of their manufacturing facilities being located in Asia. Regarding the sub-$1000 market Bauman said that anything that ships in volumes is good for SMTC. All motherboards have mixed voltage environments. In other words: " a motherboard is a motherboard is a motherboard'. I would also like to point out that SMTC now trades at a trailing Price to Sales = 3.2. This is extremely cheap for a company with net margins of 16%. (If you subtract out the one time acquisition cost, throw in more taxes, the NET margins for SMTC = 16%.) Remember too that in the last conference call management gave guidance that margins are going UP. The long term business model shoots for 20%. This makes for a very positive long term scenerio. What has happened is that the market is discounting ALL SEQUENTIAL forward sales growth for all of these equipment/chip companies and thus we have seen severe PSR phase shift for the ENTIRE group. The mantra seems to be...'sell now, ask questions later.' Unfortunately, SMTC is being treated the same as the AMAT's and KLIC's of the world whose sales are ~40% (give or take) end user demand in Asia. SMTC only has 10% end user demand and this was oulined very meticulously in the last conference call. Furthermore, I would like to mention that in a recent conference call Thomas Kurlak cites the analog component makers as a top niche for 1998. Do not get caught up in the fear. This is a great company in a great niche. Leeza Rodriguez