Circuits Assembly Online Magazine - Current Issue

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EL SEGUNDO, CA — After years of singlehandedly powering the robust growth of the global electronics manufacturing services business, Foxconn (Hon Hai) grew marginally in 2008, and the top-tier EMS market contracted, according to preliminary market-share results from iSuppli Corp.

LONDON – Despite a lackluster fourth quarter, the Cookson Group reported its 2008 revenue climbed 23% to â‚¤2.203 billion ($3.04 billion).

The company, the parent of Alpha Metals and Enthone, reported trading profits up 11% to â‚¤216.3 million ($298.3 million), and pre-tax profits climbed 18% to â‚¤176.3 million ($243.1 million).

The electronics division saw a year-over-year revenue increase of 11% to â‚¤620 million ($854.9 million) at reported exchange rates.

For the year, assembly materials sales fell 10% to â‚¤382 million (US$526.8 million) on an increase in metal prices, especially tin and silver. Chemistry sales dropped 9% to â‚¤238 million (US$328.2 million) on the sharp decline in the electronics and automotive markets.

Nevertheless, the fourth-quarter slide has continued into the first quarter, and Cookson plans to reduce its overhead by $55.2 million.

MENLO PARK, CA -- A March survey of senior operations and supply chain professionals at 75 electronics OEMs uncovered concern over the viability of key supply chain partners, including both EMS providers and component suppliers. Also, a number of companies are considering strategic operations alternatives – such as relocating outsourced production to different geographical regions or partners – to address the heightened need to further reduce costs in this challenging environment, Riverwood Solutions' survey found.

Key findings include:

· 69% of OEMs believe that supply chain management can be a source of competitive advantage; 31% believe that their supply chain is more nimble than that of their competitors.

· 53% plan to geographically relocate at least some of their outsourced production in the next two quarters; 50% plan to move some production to another EMS provider during that same period.

· 31% report being “Very Concerned” that their EMS provider will be unable to meet their delivery commitments in the coming year based on financial difficulty; less than 2% of respondents report being concerned that their EMS provider may be acquired by another company.

“The results of the OEM survey are consistent with what we are hearing from current and prospective customers,” said Courtney Ryan, senior vice president, Global Business Units at Jabil, in a press release issued by Riverwood. “OEMs continue to seek opportunities to reduce cost and improve competitiveness – but with a renewed focus on the supply assurance and financial stability of their EMS partners.”