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TWST: Patrick, let’s get the buyside perspective from you and particularly with regard to how this group has evolved into a sector for investment.

Mr. Renda: I have covered the EMS sector for the Seligman Technology Group for five years and there really wasn’t much buyside interest or sellside coverage in the EMS space until about two or three years ago. The buyside perception of the EMS industry was one of a low margin “board stuffing” business. However, over time, the EMS sector has slowly evolved into a critical link in the supply chain providing a wide array of value-added services such as new product introduction, enclosures, plastic-injection molding, even direct order fulfillment for OEMs. Today companies in the EMS sector are drastically different from what they were two, five or 10 years ago. The EMS sector finds itself at a crossroads where some companies have chosen to vertically integrate while others have elected to maintain a more horizontal approach. I realize this is a topic we will discuss later as the debate surrounding the virtues of a vertically integrated EMS model versus a horizontal model is an ongoing one within the industry and on the Street as well.

TWST: Patrick, are there any other factors that should be considered in assessing the potential performance of these stocks?

Mr. Renda: Not necessarily, the only additional factor I would monitor closely as we head into summer is the European economy. Each year, Europe tends to “go on vacation” for the summer and that, coupled with a slowing European economy, could have a dramatic impact on a return to growth for the US technology stocks. Otherwise, clearly the long-term secular trend of outsourcing is intact. The compound annual growth rate for the EMS industry is roughly 28% and, should demand start to re-accelerate in the second half of this year as forecast, and visibility subsequently improve, providing a great level of comfort for forward earnings, the multiples in the group will react accordingly.

TWST: Patrick, from your perspective, will the companies that have been highlighted by the sellside be playing a part in your strategy through 2001 and into 2002?

Mr. Renda: I think it’s a perfect time to start evaluating stocks in the EMS space and putting money to work in a select group of names. For investors who are valuation prone with a more long-term horizon, I like stocks such as Celestica (NYSE:CLS) and SCI Systems (NYSE:SCI). Both stocks trade at significant discounts to the group. SCI Systems trades at roughly 18 times a TTM (Nasdaq:TTMI) p/e. SCI continues to make significant progress with their mix. Presently, 30% of SCI’s revenue is derived from the PC market, down from 50% a couple years ago, and communications now makes up their greatest percentage of revenue at 33%. This is a very intriguing story at the current valuation.