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Technology Stocks : THREE FIVE SYSTEM (TFS) - up from here? -- Ignore unavailable to you. Want to Upgrade?

To: Jim Armstrong who wrote (1145)	3/25/1998 5:25:00 PM
From: michael c. dodge	Read Replies (1) \| Respond to of 3247

I am looking for a consulting group to get me up to speed on this industry and competing technologies---only as they may affect TFS' products, present and contemplated. Want to talk with them before the shareholders' meeting. Does anyone have experience with DisplaySearch, an Austin-based market research group focusing on FPD's ??? You can send me a private email, if desired. Thanks. mcd

To: Jim Armstrong who wrote (1145)	3/26/1998 5:17:00 AM
From: Toby	Read Replies (1) \| Respond to of 3247

Dear Jim, I agree that LCD and FED are not identical, but it's pretty clear that MOT didn't spend 150M$ on a plant to manufacture FED parts for cars. MOT is definitely aiming their FEDs towards the high end personal display market, and hoping to leverage their Si expertise in the process. I think TFS investors should be acutely aware that TFS offers a low end, low value added product, albeit one in very good demand today. The company also realizes this and is trying to keep pace by introducing LCiD and working with NatSemi. The next generation of Personal Displays in high end consumer electronics will no longer be the monocrome dot matrix type that TFS manufactures. They will be VGA (minimum) full color displays for WWW surfing and reading documents. I don't think TFS has a strategy to fill this market need. It will be filled by LT poly-Si LCD, Kopin-type approaches, and perhaps FED and some other newer FPD technologies. The question for TFS investors is how much of the low end market will remain, and how attractive that market will be. I think the demand for passive matrix, monochrome dot matrix displays will increase greatly. Many pundits talk about the day your refrigerator will have such a display and automatically inform you when you need to buy more milk (you won't ever surf your frig, however, so simple, cheap displays will do fine). I am rather skeptical whether a supplier to this market can continue to carry a PE such as TFS' since it will be pushed down into lower margin businesses. TFS is safe for the time being, and the future is open for debate. However, my opinion is this firm is not an INTC or MSFT with a powerful brand and nearly insurmountable technology/marketing advantage, it is more of a DEC who's technology is the answer today, but shows signs of not changing with the times. I have never had a position in TFS, but I would consider shorting it in the future should its PE expand with time.