SEC/N Thoughts

Recently, I was asked to speak on the evolution of used equipment in the international marketplace. My presentation was to be part of a multi-day conference being conducted for senior management.

Two weeks after the invitation was offered, it was withdrawn by the person who had originally contacted me. He explained that he was very sorry but the conference committee, made up of senior managers from across the electronics industry, had decided that a presentation on used equipment was not appropriate for a high-level discussion on the resurgence of the industry.

It's not uncommon for senior management to shy away from the topic of used equipment. Business is down all over the industry. Companies are running at less than 50% capacity and laying off employees left and right. With the exception of 300 mm, new equipment sales have fallen off to almost nothing and capital is extremely tight. Entire manufacturing lines are up for sale and companies continue to go under. Literally translated, the potential of being able to find a deal on used equipment continues to be huge. If you don't believe it, ask the companies in China that have continued buying used equipment throughout the downturn.

And if we are on the brink of a recovery as many believe, keep in mind that used equipment purchases have historically led recoveries in the equipment segment by anywhere from six months to a year.

So why wouldn't senior management want a discussion of used equipment to be part of their agenda? It's not consistent with their shiny high-tech images, and most of them don't understand the business. We all know that we tend to shy away from that which we aren't comfortable with or don't understand. As I've noted here before, very few OEM and semiconductor senior managers have ever been directly associated with manufacturing operations that have had to depend on used equipment for their livelihood.

The opportunity to get the topic of used equipment on the conference agenda is past, but the opportunity to become part of one of the fastest growing international segments of the industry is still there for the taking.