Vienna - AT&S, Europe's largest PCB manufacturer, began construction last week on a second plant in Shanghai. When it comes online in 15 months, the 75,000m² production facility will triple the company's capacity in China.
"The second plant in Shanghai will definitively put us in the position as the most modern high performance printed circuit board manufacturer in the high-tech segment," said Willi Dörflinger, chairman, in a statement. "The new capacity will come just at the right time in the second half of 2006, enabling us to tend to the climbing demand in the HDI microvia area."
Upon completion of the plant, located next to the existing plant, about 50% of AT&S' global capacity will come from its plants in India and China.The company's step toward Asian expansion takes place exactly four years after the cornerstone was laid for the first plant.
reported first -quarter losses from continuing operations of $24.2 million, down from a loss of $3.8 million last year. The company posted net sales of $20.2 million for the quarter ended March 31, down from $23 million.
The total net loss, which includes discontinued operations, was $39.4 million,
down from a loss of $6.6 million in the year-ago quarter.
The sales drop was due to significantly reduced EMS
sales in the U.S., the company said, primarily from customers rescheduling orders to
later in 2005.
Gross margin dollars were $2.6 million less than in the comparable quarter in 2004. Selling, general and administrative expenses rose, due to increased severance, consulting, accounting and legal expenses
During the quarter TFS took a $2.5 million loss on assets relating to ERP implementation,
and $900,000 for costs associated with continuing lease obligations for vacated facilities.
The company also took a $12.9 million charge for the impairment of goodwill for its EMS business
and large panel display business in Marlborough.
Ina statement, the company said that the substantial losses sustained in the past
several years has led to the retention of SG Cowen & Co. review strategic alternatives aimed
at maximizing stockholder value. Based on SG Cowen's advice, the company has exited
the display business and has signed a nonbinding letter of intent to sell its RF operations in Manila,
leaving its EMS operations in Penang, Malaysia, and Redmond, WA. It said it is looking at several merger
or recapitalization options.
"Our alternatives include sale of all or part of our EMS business, merging with another company,
recapitalization and continuation of our business, or seeking joint venture partners.
TFS guided for flat second-quarter revenue from ongoing operations. "For the remainder of 2005, our focus
will be on cost reductions and restructuring our EMS business to achieve cash flow breakeven. We believe that
the combination of our new product introduction and medical and military operations in Redmond with our
high-volume, cost-effective offshore operations in Penang will provide a strong foundation for our EMS business in the future."
At the end of the quarter TFS had cash and restricted cash of $12.4 million vs. $16.2 million
at the end of the fourth quarter 2004.
Year-on-year, days sales outstanding rose to 46 from 38, inventory turns were flat at 5.1 and cash conversion
cycle rose to 62 days from 58.
PALO ALTO, CA --Hewlett-Packard, one of the largest customers of the EMS industry (including companies such as Flextronics, Sanmina-SCI, Jabil, Solectron and Celestica) has faced sluggish demand and an inventory reduction, according to its latest earnings call. The company's total revenue slowed to 7% year on year vs. 10% last quarter.
According to Deutsche Bank analyst Chris Whitmore, strong (10%) sequential growth from HP's business critical servers offset slowing industry standard server revenue and a 6% decline in storage from last year. The division's operating margin improved to 4.4% vs. 1.8% last year.
HP experienced a rebound in printer demand in the April quarter, with sales up 5% year-on-year following aggressive price cuts. Home hardware sales increased 3%, while business printers grew 4% from last quarter (Flextronics has the most exposure to home hardware sales while Jabil has the most exposure to business printers, DB said).
Revenue from PCs grew 6%, decelerating sharply from last quarter's 11% growth -- as desktop growth fell to 1% from 8%. The commercial business increased 3%, with a 10% consumer growth (Sanmina-SCI manufactures commercial desktops for HP).
DB also reported that HP is selling two PC manufacturing plants to Hon Hai in Australia and India.
HP reduced inventory by $656 million and days of inventories to 35 (the lowest level since the second quarter of 2002). Roughly $500 million of the decline was in the printing division.
DB analysts noted that demand remains lackluster and pricing remains aggressive throughout the IT HW industry. In addition, HP's new management team could implement significant changes to its supply chain in an effort to drive lower costs, creating risk to EMS vendors' existing relationships with HP. That said, HP's inventory management meaningfully improved in the quarter.
The first opportunity is for Nepcon Shenzhen, Aug. 30-Sept. 2. The SMTA is looking for papers related to Implementing Lead-Free (such as case studies from OEMS and CMs). The program will also focus on Lead-Free Assembly Materials and Processes.
Papers presented in Chinese are preferred. Your company must provide translation for any English submissions. Abstracts need to be emailed to joann@smta.org by May 30.
The SMTA is also soliciting workshops or courses to be presented throughout 2005 and 2006 in various cities in China. A fee and travel expenses will be provided. Courses must be taught in Mandarin (handouts can be in English). Course proposals should be submitted to joann@smta.org by June 17.
The final opportunity is for Productronica in Munich, Nov.15-18. Presentations in German are preferred. Email your abstract by June 17 to joann@smta.org.
Minneapolis, MN - The Surface Mount Technology Association (SMTA) is hosting its SMTA/CAVE Harsh Environment Electronics Workshop on June 28-29 in Indianapolis. Jointly organized by the SMTA and Auburn University- Center for Advanced Vehicle Electronics, the workshop addresses the concerns related to harsh environment electronics and the challenges facing the electronics community.
It is intended to bring together the needs from end-users with the capabilities of the research community and industrial supply base. In addition, industrial needs for non-automotive vehicle requirements are addressed.
Harsh Environment Electronics Sessions will include:
Thermal Interface Materials
Component Reliability for Harsh Environments
Module Overmolding for Harsh Environments
Systems Design for Harsh Environments
Lead-Free Soldering and Solder Alternatives
Register by May 27 to receive a 10% discount.
Full workshop details and on-line registration can be found at:
http://www.smta.org/education/symposia/symposia.cfm#harsh.
Taipei -- EMS provider Foxconn Electronics may buy two desktop PC assembly plants in Australia and India from Hewlett-Packard, an Asian news source reported.
Under the agreement, Foxconn (the registered trade name of Hon Hai Precision Industry) will take over design and manufacturing management at the two plants, and may eventually take over HP plants in Europe, according to a report originally published in the Chinese-language Commercial Times.
In an article on Forbes.com, Foxconn affirmed the Australia takeover but denied the Indian acquisition.
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