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  • jaretwilson jaretwilson Jan 30, 2013 8:29 PM Flag

    Land and products

    Well, they practically quadrupled their sales in the fourth quarter from the year ago period, and are adding 13.3" ultrabook LCMs this spring, so I think you can have both cake and icing.

    As far as diversity of customers, that's a bit tougher. For small/medium LCMs there's Japan, Korea, Taiwan, and China. There's Japan Display and Sharp in Japan...very high technology, top of the line. In Korea there's Samsung and LG...they do their own LCMs, and while high quality, they don't have the low power innovations Japan does, though a bit lower cost than Japan. Also, Samsung is concentrating on AMOLED more now. Taiwan has AU Optronics and Innolux, decent quality and resolution, but behind Japan and Korea, and they do their own work. Finally there's China, with various low cost providers but low tech and the margins really wouldn't be there to make it worth Nam Tai's time.

    Nam Tai used to do lots of other electronic things including bluetooth headsets, calculators, electronic language teaching aids, etc. They could still do those, but the volume was nothing compared to the LCM business they are in now. They could do something like camera modules for phones and digital cameras, and have done that in the past. It's high volume, but there's significant competition. Anyway, the way to get more diversity would be to try and enter another area of electronics, but right now they just don't have the factory floor space to do that in a big way and the LCM business is treating them very well.

    Sentiment: Strong Buy

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    • My mistake. I sold Cirrus today because of concerns that Apple was seventy percent of sales. I took that money and bought more NTE. I felt there was more upside with NTE and the dividend is an added bonus. I appreciate your comments.

      Sentiment: Strong Buy

      • 1 Reply to dangiteli
      • I would never own cirrus. One customer, my guess one product with that one customer??? Fabless chip, which means they basically have a design??? And that design will compete with another company that has a design??? If the technology changes in a few months, the other company might win the contract and then ciruss is left with... not much, and a drop of 70% in the stock price. Other than P/E, cirus is expensive in every metric. And P/E can vanish in one day.

        Try replacing NTE. You need to replace a plant with 10,000 people, and QA programs , expertise…. etc etc..... And the industry is tight, you don't really have spare capacity lying around. Also NTE has more cash/share and cheaper book value, and now the land that is worth a huge amount. I could keep going but I think that is enough.,

        To be honest, I know nothing about cirrus, so i may be wrong. I never got past the one customer and fabless design aspect.