NEW YORK -- Alcatel-Lucent is pulling most of its production now outsourced to Celestica, Flextronics and Sanmina-SCI back in house, Credit Suisse analysts are reporting.

The move will take nearly $2 billion out of the hands of the major contract assemblers. Instead, production will take place at Alcatel Shanghai Bell.

Flextronics will take the biggest hit, an estimated $1 billion drop in revenue in 2009, analyst William Stein said. Celestica will lose about $500 million,while Sanmina-SCI will take a $400 million hit. 

While Celestica and Flextronics would remain profitable without the Alcatel-Lucent business, it could drop Sanmina-SCI into negative territory, the report says.

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