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We still can't say for sure, were we hit by a truly perfect storm, or are the characteristics of the telecommunications business just no good any more?” Lucky said.

PL123E-05HSI_Datasheet PDF

We still can't say for sure, were we hit by a truly perfect storm, or are the characteristics of the telecommunications business just no good any more?” Lucky said.

I would say it is unusual for a currency to move as quickly as the dollar did [in 2003],” said Tuula Hatakka, senior vice president of group treasury at Elcoteq Network Corp., in Helsinki, Finland.

Even so, the euro's appreciation hasn't been the subject of management discussions at Elcoteq, because the company's hedge strategies are working satisfactorily, according to Hatakka.

PL123E-05HSI_Datasheet PDF

Elcoteq, like competitors Flextronics International Ltd. and Solectron Corp., also buys derivatives, or forward purchases of currencies, as an additional hedge strategy. Should the outlook for dollar-dominated sales appear to be too gloomy in light of the exchange rate movement, Elcoteq will buy dollars to compensate.

At the beginning of each quarter we take the sales forecast and the currency exposure estimate, and based on that situation we do the hedging,” Hatakka said.

Additionally, Elcoteq's global operations are spread to provide something of a natural hedge. Elcoteq has factories in dollar-pegged China; in Estonia, whose currency is tied to the euro; and in Hungary, which has a free-floating currency. At the end of the day, financial reporting has to be combined into one currency. An impact on net sales may be unavoidable, but the desired effect is to protect the bottom line, Hatakka said.

PL123E-05HSI_Datasheet PDF


Besides financial reporting, the exchange rate has other effects. For instance, European companies find that the value of dollar-based companies has dropped, making acquisitions more attractive.

PL123E-05HSI_Datasheet PDF

Tech Forecasters' Miscoll said acquisition opportunities are increasingly attractive because the electronics industry is turning around. The total EMS industry worldwide showed $88 billion in revenues in 2002 and $95 billion in 2003, with a 10 percent compounded annual growth rate expected over the next five years after a two-year decline, Miscoll said.

This is not the response that the industry needs if its plans to increase business usage of the advanced data service functionality offered by smartphones are to be realized”, said Wyatt.

Infineon Technologies AG said it has opened a new radio frequency identification (RFID) center in Graz, Austria, to support designers, equipment manufacturers and end-market users interested in developing and deploying the technology.

The RFID system lab is charged with identifying the practical uses of the radio frequency technology especially in the area of logistics and supply chain management of goods and services, according to the company.

RFID has been receiving greater attention from electronic component suppliers and equipment vendors since last year when major retailers like Walmart Stores Inc., Target and the United States Department of Defense announced they would begin utilizing the technology in their operations.

Infineon said it would adopt a comprehensive development approach that would address all segments of the technology, including the antenna, smart label readers and the system platforms required for RFID operations.


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