Will the Equipment Makers' Dilemma Continue?

The following video is part of our "Motley Fool Conversations" series, in which technology editor/analyst Brenton Flynn discusses topics around the investing world.

The Internet era has led to the buildout of massive telecommunciations networks to facilitate the growth in traffic. PC ownership surged, and now the torch is being passed to smart mobile devices filled with various components manufactured at semiconductor fabrication facilities around the globe. To meet growing demand, these facilities are constantly expanding capacity and need specialized equipment to do so. Similarly, traffic demands force telecommunications companies to upgrade their networks regularly, requiring specialized equipment as well. 

Being an equipment maker might sound like a good business, but things aren't that clear-cut. Equipment makers sell into a highly concentrated customer base, and in the following video, Brenton discusses some of the challenges that presents for these companies and their investors.

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Brenton Flynn has no positions in the stocks mentioned above. The Motley Fool owns shares of Intel. Motley Fool newsletter services recommend Intel. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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