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Strategies & Market Trends : Electronic Contract Manufacture (ECM) Sector -- Ignore unavailable to you. Want to Upgrade?

To: Douglas V. Fant who wrote (1390)	3/24/1998 11:52:00 AM
From: Rosemary	Read Replies (1) \| Respond to of 2542

Doug, I see that the buying has started in this sector again this morning. It was going to happen, only the when was unknown. DIIG is really looking strong and HDCO, I haven't seen the others yet.

To: Douglas V. Fant who wrote (1390)	3/24/1998 12:26:00 PM
From: jeffbas	Read Replies (1) \| Respond to of 2542

I think your parallelism idea is very sound, particularly considering the interrelationship of the ECM's and its customers. However, a similar percentage decline has the implication that the better ECM fundamentals (because of the secular trend toward outsourcing) was fully reflected or even over-reflected in the prior peak prices (because the decline in fundamentals has been less than that of its customers).

To: Douglas V. Fant who wrote (1390)	3/26/1998 6:07:00 PM
From: Nevin S.	Read Replies (1) \| Respond to of 2542

Doug, I tend to agree with you, however, I think ECMs can recover quicker than semiconductor capital equipment companies. The reason - capital equipment is very expensive and many chip companies will be slow to upgrade or increase capacity when ASPs are depressed and demand is slower. On the other hand ECMs manufacture a wide range of goods from consumer products to industrial controls and are not tied to the fortunes of one industry. I know some will disagree with this statement about semi cap. equip. and say that there will be investment in technology that allows shrinkage of die sizes, but the majority of capital equip. purchases are made to expand capacity when chip demand and mfg volume expands. Before anyone blasts me with any disparaging remarks, I'm sitting on a substantial long position in CYMI and licking my wounds.