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EL SEGUNDO, CA – Revenue for the global contract manufacturing industry, consisting of EMS and ODM providers, is set to expand to $432.3 billion by 2012, rising at a CAGR of 7.2% from 2007.

While a $126.7 billion gain in revenue during a five-year period may sound like fantastic growth, it actually represents a major slowdown compared to years past, on a percentage basis, says iSuppli Corp.

SAN JOSE, CA – Tessera Technologies Inc., provider of miniaturization technologies, reported total second-quarter revenue of $56.3 million, up about 17% year-over-year.

Net income was $84,000, down significantly from a net income of $9.9 million during the same quarter last year. Income for the second quarter 2008 included non-cash charges of $5.8 million for stock-based compensation and $2.9 million for amortization of acquired intangibles.

Total revenue for the six-month period ended June 30 was $115.7 million, up 19.2% year-over-year. Net income for the period was $2.3 million, down 89% compared to the same period in 2007.

“The significant year-over-year growth in our high margin, recurring royalties highlights the fundamental strength of our business,” said Bruce McWilliams, chairman, president and CEO for Tessera. “In the second half of 2008, we expect to build on the traction gained in our Consumer Imaging business, as illustrated by the new license agreement with Samsung.”

Tessera expects third-quarter total revenue to be within the range of $62 million to $64 million.

LOUISVILLE, KY – Sypris Solutions reported revenue of $110.4 million for the second quarter, down nearly 5% year-over-year.

The company reported a net loss of $900,000 compared to a net loss of $2.3 million for the second quarter last year.

ELKHART, IN – CTS Corp. announced second-quarter revenues of $186.1 million, up 8.9% year-over-year.

Net earnings of $10 million were up 41% compared to the same period in 2007.

EL SEGUNDO, CA – Although China’s semiconductor purchasing boom is cooling down, the nation’s demand for locally designed chips is heating up, with domestic consumption expected to rise by more than 60% from 2007 to 2012, according to iSuppli Corp.

By 2012, $42.1 billion worth of Chinese-designed semiconductors will be purchased for use in electronic equipment made in the nation, up 63.4% from 2007, says the research firm.

“The growth of China's semiconductor consumption has slowed since 2005,” said Kevin Wang, senior manager for China Research at iSuppli. “The main reason is that foreign electronic equipment makers have decelerated the pace of their manufacturing outsourcing to China. This is having a negative impact on China’s electronic equipment manufacturing and semiconductor industries. China’s semiconductor industry now is undergoing a transformation, with an increased focus on designing chips for electronic products that are popular in the nation.”

China- and Hong Kong-based electronics OEMs and contract manufacturers are driving the demand for these locally designed chips. However, foreign ODMs that develop and manufacture goods for Chinese OEMs also are contributing to the growth, says iSuppli.

“In the electronics industry, China often is seen simply as a low-cost manufacturing region,” Wang said. “However, the rise of the semiconductor design business in China shows the nation’s high-tech future increasingly will reside in capitalizing on local brainpower to produce innovative products that appeal to the domestic audience.”

Mobile handsets were the largest application for Chinese-designed semiconductors in 2007, consuming $4.4 billion worth of chips for the year. PMP/MP3 players were the second-largest application, buying $2.2 billion worth of semiconductors.

Mobile handsets will remain the largest application through 2012, when the area will consume $9.8 billion worth of domestically designed chips. Notebook PCs by 2012 will become the second-largest area for domestically designed semiconductors, with $3.4 billion worth of consumption for the year, says the firm.

The fastest-growing segment for domestically designed semiconductors during the next few years will be mobile communications infrastructure equipment, which will experience a 24.9% CAGR from 2007 to 2012. Next will be LCD-TVs, which will achieve a 21.8% CAGR during the same period, according to iSuppli.

Chinese manufacturers that concentrate on other consumer electronics products, such as digital set-top boxes and white-good appliances, also will increase their spending on domestically designed chips during the coming years. Other expanding application areas will include car infotainment products and security systems such as surveillance devices, smoke detectors and door security systems.

The boom in locally designed semiconductor usage in China comes at a time of deceleration for the nation’s overall chip consumption. China's consumption of all kinds of semiconductors is expected to expand to $81 billion in 2008, up 7% year-over-year, iSuppli predicts. Consumption is expected to grow at a 7.7% CAGR from 2007 to 2012. In contrast, China’s overall semiconductor consumption grew at a CAGR of 27.7% from 2001 to 2006.

This year is a difficult one for Chinese electronic equipment producers, especially smaller manufacturers, says iSuppli. China’s central government has adopted a tight monetary policy to avoid overheating the economy, even while it reduced export tax rebates. Furthermore, the increasing value of the Chinese yuan is placing great pressure on domestic companies producing low-end electronic equipment. Furthermore, operating and labor costs are still rising, along with prices for food, gasoline and electricity. Higher inflation, a weakened equity market and the devastating earthquake in Sichuan province negatively affected domestic market demand for electronic equipment in the first half of 2008.

iSuppli anticipates the market will be in a readjustment period for the remainder of 2008 and 2009. Small companies without strong R&D capabilities will exit the market. At the same time, many leading Chinese OEMs, such as Huawei and ZTE, will grow larger by aggressively targeting international markets. Meanwhile, Chinese independent design houses are expected to acquire more international clients.

ANGELTON, TX – Benchmark Electronics president Gayla Delly told analysts the telecom, industrial controls and medical sectors are bright spots for the EMS company, but a customer shift to lower-priced computers is hurting revenues.

For the June quarter, Benchmark saw sequential strength in industrial controls (up 13%), medical (up 7%) and telecommunications (up 4%). Computing fell 6% – out of step with typical seasonality – and test and instrumentation slid 12%.

INGOLSTADT, GERMANY – Zestron this year will open a 30,500 sq. ft. facility in Ingolstadt, about 62 miles north of Munich. The new European headquarters will include a state-of-the-art, 9,000 sq. ft. analytical and technical center, the largest in Europe, the company said.

The company has also hired an unspecified number of process engineers. The facility is scheduled for completion by the end of 2008.

Last year, Zestron America moved to new headquarters in the US and the company expanded its facility in China.

PENANG, MALAYSIA – Escatec has opened an additional 8,125 sq. ft. facility in Penang, its fourth on the EMS company’s campus.

The new building has 3,250 sq. ft. of production space, in which the company is housing two SMT lines. The facility also has 4,875 sq. ft. of storage, office and R&D space.

The new plant is set up for low-to-medium volumes, box builds and potential transfers from Escatec Switzerland.

By year-end Escatec expects to have approximately 200 employees in the facility.

BANNOCKBURN, IL – More than 40% of manufacturing and purchasing personnel have no understanding of the REACH regulation as it affects their companies, according to a recent IPC survey. The same holds true for nearly one-third of senior management, 29% of engineering personnel, and 28% of environment, health and safety personnel, says the association.

The survey, sent to executives in North America and Europe, reveals that even with a deadline for pre-registration of substances quickly approaching, only 18.3% of companies have identified and/or inventoried all substances in their products. In addition, only 60.5% of chemical supplier respondents are planning to register or pre-register substances at all.

The EU legislation concerning the Registration, Evaluation, Authorization and Restriction of Chemicals took effect June 1, 2007. REACH covers substances in nearly all applications, totaling about 30,000 unique chemicals. The legislation makes bidirectional communication throughout the supply chain imperative.

IPC has scheduled a Sept. 18 Webcast on pre-registration issues for PCB and EMS suppliers.

CARLSBAD, CA – Palomar Technologies’ management has bought out the original investor group that spun the company out of Hughes Aircraft in 1995.

Local management, with Palomar for many years, now owns the provider of precision automation equipment and contract assembly services for microelectronics.

No financial terms were disclosed.

“All of our current operations, products, and services will continue unchanged,” said Bruce Hueners, Palomar Technologies president and CEO.

NEWARK, NY – EMS provider IEC Electronics Corp. reported third-quarter revenue of $11.9 million, up about 5.9% year-over-year. Net profit for the quarter was $868,000, up 36.3% compared to the same period last year.

IEC had revenue of $35 million for the first nine months of fiscal 2008, up 10.6% year-over-year. Net profit for the period was $1.96 million, up slightly more than 70% compared to the same period in 2007.

W. Barry Gilbert, chairman of the board and CEO, stated, “We completed the acquisition of Val-u-Tech, refinanced the company with M&T bank, added two new customers, settled our long-standing lawsuit with GE, and improved our operating profit margins…

We expect our consolidated sales will increase for next quarter to between $14.5 million to $15.5 million…”

NORCROSS, GA – Micromeritics, a manufacturer of analyzers and instruments, has moved into a 140,000 sq. ft. facility that doubles the company’s floor space and added a surface mount line among other equipment.

The machine shop now covers 18,000 sq. ft., and manufacturing has been modernized and expanded to 24,000 sq. ft. The applications development laboratory and Micromeritics Analytical Services have both doubled in size. The training center also has been expanded.

The company plans to purchase new lab equipment and has added personnel.