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To: Douglas V. Fant who wrote (2363)	3/29/1998 8:17:00 PM
From: Kurthend	Respond to of 3029

Doug, I just glanced over AFLX 10K report on Edgar. I believe it is dated 3/26/98) Below is the part about AFLX competition: COMPETITION The flexible circuit interconnect market is differentiated by customers, applications and geography, with each niche having its own combination of complex packaging and interconnection requirements. The Company believes that it competes principally on the basis of design capability, price, quality and response time to design changes and technological advancements in underlying applications and the ability to offer a total flexible circuit interconnect solution, including the ability to ramp rapidly up to and down from volume production and to provide assembly and test services. In addition, during periods of recession or economic slowdown in the electronics industry and other periods when excess capacity exists, electronic OEMs become more price sensitive, which could have a material adverse effect on interconnect pricing. The Company believes that once an OEM has selected a particular vendor to design and manufacture a flexible circuit interconnect, the OEM generally relies upon that vendor's design for the life of that specific application and, to the extent possible, subsequent generations of similar applications. Accordingly, it is difficult to achieve significant sales to a particular customer with respect to any application once another vendor has been selected to design and manufacture the flexible circuit interconnect used in that application. While this market paradigm may provide a barrier to the Company's competitors in the markets served by the Company, it also may present an obstacle to the Company's entry into other markets. The Company has targeted several markets as areas for its growth, but there can be no assurance that the Company will be able to achieve significant sales in any of these new, targeted markets. The Company experiences competition worldwide from a number of leading foreign and domestic providers, such as Nippon Mektron ("NOK"), Fujikura Ltd. ("Fujikura") , Multi-Fineline Electronix, Inc. ("M-Flex"), Sheldahl, Inc. ("Sheldahl") and Parlex Corporation ("Parlex"). NOK and Fujikura are Japan-based suppliers substantially larger than the Company with greater financial and other resources. Although the Company believes that a significant portion of the sales of these companies are in direct competition with the Company, the Company also believes that both of these competitors derive a majority of their revenues from Japan-based system manufacturers in the consumer goods market segment. M-Flex, Sheldahl and Parlex are U.S.-based flexible circuit manufacturers that have lower sales of polyimide flexible circuits than the Company and have historically targeted suppliers of computers, communication and automotive services, and the military, respectively. Expansion of the Company's existing products or services could expose the Company to new competition. Moreover, new developments in the electronics industry could render existing technology obsolete or less competitive and could potentially introduce new competition into the market. There can be no assurance that the Company's competitors will not develop enhancements to, or future generations of, competitive products or services that will offer superior price or performance features to those of the Company or that new competitors will not enter the Company's markets. Finally, as many of the Company's competitors are based in foreign countries, they have cost structures and prices based on foreign currencies. Accordingly, currency fluctuations could cause the Company's dollar-priced products to be less competitive than its competitors' products priced in other currencies. Since its December 1995 acquisition of ADFlex U.K., the Company competes in assembly matters with leading flexible circuit assembly providers such as Smartflex Systems, Inc. and Solectron Corp. The Company believes that competition in assembly matters is primarily driven by availability of assembly technology, price and cycle time. The Company believes that it will compete favorably with these competitors because it offers its customers a complete flexible circuit interconnect solution including design, fabrication, assembly and testing. The Company's competitors can be expected to continue to improve the design and performance of their products and to introduce new products with competitive price/performance characteristics. Competitive pressures often necessitate price reductions which can adversely affect operating results. The Company will be required to make a continued high level of investment in product development and research, sales and marketing and ongoing customer service and support to remain competitive. There can be no assurance that the Company will have sufficient resources to continue to make such investments or that the Company will be able to make the technological advances necessary to maintain its competitive position in the flexible circuit interconnect market. There can be no assurance that existing or future competitors will not be able to duplicate the Company's strategies, that the Company will be able to compete successfully in the future, or that competitive pressures faced by the Company will not have a material adverse effect on the Company's business, financial condition, results of operations and cash flows.

To: Douglas V. Fant who wrote (2363)	4/1/1998 8:49:00 PM
From: Kurthend	Read Replies (1) \| Respond to of 3029

Doug and Mark I just looked at First Call and the newest estimate for the qtr and year are .28 and $1.58 respectively. Things may change for the DD industry as the article in Asia Times has some intersting news on SEG. It was on SEG thread number 4822: Seagate Rehires Former Employees to Meet Demand April 1, 1998 (KUALA LUMPUR) -- Seagate Technology is rehiring former employees on a temporary basis after laying off more than 2,000 people in its Malaysia plants in February. The move is to meet last-minute product orders to be shipped by June from its Prai assembly plant, said Penang Seagate Industries (M) Sdn., Bhd. managing director Timothy Harris. The company already has recruited 130 ex-staff by offering them their last drawn salary for temporary employment of between one and three months. It has another 170 more vacancies to fill. Seagate Malaysia's manpower shortage was a direct result of a global retrenchment exercise carried out in February that triggered higher-than-expected attrition. The company offered retrenchment benefits of between two months and 12 months salary for those who resigned voluntarily. "After the restructuring, the people who left were more than we expected," said Harris. As of Feb. 16, Seagate had laid off 1,791 Malaysia staffers and 400 Indonesians from its plants in Penang, Prai and Ipoh. Seagate Malaysia, in an earlier statement, had stated it only planned to cut 750 indirect staff from its payroll. The layoffs were part of the 10,000 jobs Seagate planned to slash worldwide in a bid to restructure operations after a shortfall in revenues. The global disk drive industry is reeling from a supply glut, weak demand and intense pricing pressures. Leading U.S. suppliers Seagate, Western Digital Corp. and Quantum Corp. are facing stiff competition from Asian suppliers Fujitsu Ltd., Samsung Group and Hyundai Group. In December 1997, Seagate had announced it would shut down a plant in Clonmel, Ireland and fire 1,400 workers, sparking fears that Asian plants would be similarly affected. Harris reaffirmed the company will not shut any of its Malaysia plants. "Our plans to transfer additional high technology products and processes into Malaysia also remain unchanged," said Harris, who is also a senior vice president of the company. Seagate Malaysia currently has a work force of 17,000. The company discontinued head stack and head gimbal assembly manufacturing as of February, but it continues to manufacture disk drives in Prai and recording heads in Penang and Ipoh and to assemble printed circuit boards in Johor. nikkeibp.asiabiztech.com. At least the next 1-3 months looks good:)