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News

SAN FRANCISCO – Most EMS companies are seeing normal to tepid demand, and the economy remains the top concern, a leading industry analyst said this week.

CERRITOS, CA – Corelis Inc., a supplier of boundary-scan and JTAG functional emulation test tools, today announced a 30% expansion of its facility.

The larger plant will house Corelis’ expanded quality program, DfT support group and a section specifically organized to participate in industry standards.

"The push behind our expansion is an increase in customer demand, as well as the need to expand our research and development departments,” said George La Fever, president and CEO of Corelis. "With the new space, we will be able to serve the needs of our current clients, plus have additional capacity available to support prospective clients. Furthermore, we will have the room to expand our headquarters training facility."

SAN JOSE – Worldwide semiconductor manufacturing equipment billings reached $7.83 billion in the second quarter, down 26% sequentially and 29% year-over-year, SEMI reported.

ROUND ROCK, TX – Amid Dell Inc.’s recently announced plan to outsource computer production, speculation has risen that one or more EMS firms could soon make a play for the world’s second-largest PC maker’s facilities.

SPOKANE VALLEY, WA -- Electronics manufacturing services firm Key Tronic Corp. expects to begin a new manufacturing program with Kaz Inc. that could be worth more than $25 million in annual revenue, the company said today. The program, which wasn't disclosed, should begin in December and could lead to other deals with Kaz.

Production would be conducted at Key Tronic's manufacturing facility in Juarez, Mexico.

Kaz provides consumer, healthcare, and home and garden products.

For the year ended June 28, Key Tronic reported revenue of $204.1 million.

WESTLAKE, OH – Nordson Corp. will take a $7 million charge for severance and other job-cutting costs for its fiscal fourth quarter ending Oct. 31.

Nordson, the parent company of Asymtek, EFD, Dage and YesTech among others, will take an additional $13 million charge in fiscal 2009 as it reduces head count in North America and Europe.

The cuts, which will include retirements and attrition, are expected to save the company about $30 million annually. Nordson also plans changes to streamline its marketing and sales organizations.

In a statement, chairman, president and CEO Ed Campbell said, "In making these changes now, we are being proactive at a time when Nordson is performing well."

EL SEGUNDO, CA – China was hoping for an economic boost from the Summer Olympics, but the event actually had the opposite effect on the nation’s DRAM market, plowing a trough in demand right before the all-important holiday season, according to iSuppli Corp.

With China’s attention focused on the event, third-quarter DRAM shipments in the nation are expected to post virtually no growth sequentially, falling short of expectations, says the research firm.

However, while iSuppli believes DRAM demand will begin to recover sharply at start of the pre-holiday ramp, the industry still faces significant inventory, suppressing prices. In the spot memory market, pricing for 1Gbit DDR2 DRAM dropped by a stunning 18% during the week of Sept. 1. iSuppli expects a severe price erosion for the entire month of September. Because of this, it’s a great time to buy DRAM in China, according to the firm

“The games clashed with the traditional summer promotional season for PCs in China, with many consumers glued to their TVs and absent from stores,” said John Lei, analyst, memory ICs and storage systems for iSuppli. “This caused sales momentum to slow. Furthermore, all the IT equipment required for the Olympics was purchased years before the event, meaning there was no Olympic boost for DRAM demand.”

Even before the Olympics, consumer PC demand in China was already facing economic headwinds because of rising inflation, says iSuppli. Beyond this, China’s government engaged in stricter imports control during the Olympics, causing purchasing activity on the DRAM spot memory market to decline.

With the conclusion of the Olympics and the impending start of the holiday season, consumers should start buying more PCs, driving domestic demand for DRAM, says the firm.

Furthermore, China’s consumer price index began to decline in the second quarter and is likely to continue to decrease throughout the second half, reducing inflationary pressures and encouraging consumers to spend.

With most construction and provisioning of national IT facilities completed prior to the Olympics, most PCs now in use at these operations are at least two to three years old. These systems will need to be replaced or upgraded, particularly with the 60^th National Day events to be held in 2009.

Also, fast-growing Chinese Internet service companies will be upgrading their systems as they expand their operations to attract more customers. Rather than buying new equipment, many companies are likely to take a cheaper route and upgrade the DRAM in many of their systems, iSuppli predicts.

Regardless of the third quarter, China remains one of the most vibrant markets for DRAM in the world. National PC penetration per family is only at about 55%, which means computer and DRAM demand will continue growing in the future. Much of the growth will be in lower-cost white box PCs, whose sales growth is expected to outperform the branded computer segment in the coming years.

As a result, iSuppli predicts China’s DRAM market will avoid a downturn.

JASPER, IN -- Kimball Electronics will close the plant of recently acquired Genesis Electronics Manufacturing and move the production and staff to its own Tampa, FL, site -- on the other side of the parking lot.

Consolidation of the two facilities is scheduled to be completed in approximately six months.

ARLINGTON, VA -- August orders for electronics components rose, reversing a summer dip, the Electronic Components Association said today. Orders remained flat year-over-year, however, the trade group said.

ELK GROVE VILLAGE, IL – EMS firm SigmaTron International reported fiscal 2009 first-quarter revenues of $38.5 million, down 3.3% year-over-year.

Net income was $579,324, down nearly 30% compared to the same period last year.

The company said that while backlogs have remained steady, customer inventory levels are dipping in response to uncertainty over the economy.

“While our first quarter has historically been one of our softer quarters in terms of revenue,” said Gary R. Fairhead, SigmaTron president and CEO, “I believe the drop in revenue indicates the concern our customer base has regarding the economy. As the economy slows, inventory levels are a significant concern, and I believe the lower revenues are reflective of our customers making a modest adjustment to their inventory levels for the balance of calendar 2008.”

He said that given the uncertainty regarding the economy, the second quarter revenue is expected to ramp slower and lower than in prior years.

During the quarter, SigmaTron laid off personnel at its factories in Elk Grove Village, IL, and Mexico.

THIEF RIVER FALLS, MN – Component distributor Digi-Key Corp. will distribute Altium’s Desktop NanoBoard, including a 12-month timed Altium Designer License.

Digi-Key also plans to carry Altium’s NanoBoard plug-in peripheral and FPGA daughter boards.

The Altium products are available for purchase directly from Digi-Key.

No financial terms concerning this agreement were disclosed.

SAN JOSE –Texas Instruments VP of emerging medical applications Doug Rasor will keynote the upcoming Medical Electronics symposium: Technology Concepts Enabling Product Reality.

His talk, How Technology will Revolutionize Healthcare in the 21st Century and Beyond, will highlight the third annual MicroElectronics Packaging and Test Engineering Council event.

The event takes place Sept. 25 at Arizona State University in Tempe.

Other sessions will include Revolutionary Concepts in Medical Electronics; Advanced Materials for Medical Electronics; Key Enabling Technologies, and Next Generation of Bio-Medical Systems.

For more information and to register, contact bcooper@meptec.org or visit www.meptec.org.