NEW YORK -- Revenue growth among publicly traded EMS companies was up sharply on average during the first quarter, but component availability somewhat tempered the rise, according to an industry analyst.

 

Contract electronics manufacturers reported sales rose 14% on average quarter-over-quarter, Sherri Scribner of Deutsche Bank Equity Research wrote in a research note today. 

EMS revenue from the networking and telecom segments grew during the period, rising 6% sequentially on average.  Industrial also was strong, while server and storage revenue fell 13% on average. 

Something to watch is inventories, which are rising faster than sales, in part because component shortages are increasing the work-in-process levels at EMS firms. Inventory was up 9% sequentially on average, DB said, while EMS firms are guiding for 4% average sales growth in the second quarter.

DB singled out custom semiconductors as the component most frequently cited for tight capacity, noting constraints in connectors, capacitors, LCD panels and memory. Capacity constraints are expected to continue through the September quarter, DB said.

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