News
SAN JOSE, July 20 - Sanmina-SCI showed a third-quarter profit as revenues jumped nearly 16% from the year-ago quarter, but the company will take a $100 million restructuring charge as it reduces capacity in North America and Europe.
For the third quarter ended June 26, Sanmina-SCI reported revenues of $3.07 billion, up 7.2% sequentially and 15.9% over last year. Operating income was $68.8 million, an increase of 21.1% over the prior quarter and up 72% from last year.
Sanmina will incur a restructuring charge of up to approximately $100 million as it shifts capacity from North America and Western Europe to Eastern Europe, Latin America and Asia.
"Our Eastern European, Latin American and Asian operations are operating more efficiently than previously forecast," said Jure Sola, Sanmina's chairman and CEO, in a statement. "As a result, we plan to realign our manufacturing operations in high-cost locations, and leverage our expanding capacity and technical capabilities in more cost-efficient regions such as Eastern Europe, Latin America and Asia." However, Sanmina's PCB capacity utilization rates are reportedly somewhat lower than other major firms. Merix, for example, recently reported capacity utilization rates of over 90%.
By restructuring, Sanmina-SCI expects to save $22 million to $24 million per quarter, president and COO Randy Furr said Tuesday on a conference call with analysts. The company did not say which plants were targeted for closure.
Earlier in the quarter, Sanmina-SCI announced the pending purchase of Pentex-Schweizer, a Singapore-based PCB company.
For the quarter, cash cycle days improved to 31 days and inventory turns rose from 9.3 in Q2 to 10.4. At quarter's end, Sanmina reported $1 billion in cash and short-term investments, working capital of $2.2 billion and stockholders' equity of $3.3 billion.
"Our results this quarter are primarily due to growth in key customer end-markets and increased demand for our high-end EMS product programs," said Sola.
Sanmina-SCI reaffirmed its guidance for fourth-quarter revenue to be in the range of $3.1 billion to $3.3 billion.
The 90-day average of worldwide bookings was $1.61 billion, up 3% from the revised May numbers and 123% year-on-year.
The 90-day average of worldwide billings was $1.48 billion, up 5% from May and 91% ahead of last year.
"Despite the premature negative commentary by some Wall Street analysts, the semiconductor equipment industry continues to maintain growth at high levels," said Stanley Myers, president and CEO of SEMI. "Total bookings remained strong throughout the second quarter and are at levels more than double that of one year ago."
A book-to-bill of 1.08 means that $108 worth of orders were received for every $100 of product billed for the month.
Carlsbad, CA -- Asymtek (www.asymtek.com) has developed a method for applying solder ball reinforcement material to semiconductor packages that can eliminate the need for dispensing secondary underfill in PCB assembly.
The company's DispenseJet DJ-9000 shoots a fluid stream of underfill adhesive as small as 100 micrometers wide between balls on CSPs and other BGA packages during the semiconductor packaging process. Other methods of pre-applied underfill have resulted in contaminating the solder balls or have been too costly to ramp into production.
Jetting the underfill prior to board assembly without contaminating the solder balls allows semiconductor packaging companies to offer packages with improved reliability without the cost of traditional underfilling.
Typically, CSPs or other BGA packages require adhesive underfill to glue the component rigidly to the PCBA to prevent failures due to shock. If the primary failure of a non-underfilled CSP or other BGA package occurs at the ball-package interface, the pre-applied solder ball reinforcement reduces the probability of joint failure at that interface.
The cured reinforcement material relieves the stress at the ball-substrate interface by reducing the geometric stress concentration factor at that point. Therefore, the solder joint withstands more load during shock-loading or thermal cycling.
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