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News

TAIWAN – In an attempt at a major turnaround for BenQ Corp., the Taiwanese ODM's board of directors approved a plan to spin off its branded business and morph to a fabless model.

BenQ will be renamed Jia Da Corp., while the spinoff will take the name BenQ. The new company will be a fully owned subsidiary of Jia Da Corp.The plan is subject to approval by shareholders on June 15; the company's board has set the spinoff for Sept. 1.

SANTA CLARA, CA – Sun Microsystems Inc. has reported third-quarter net income of $67 million, compared with a loss in the third quarter last year of $217 million.

The Santa Clara-based company reported weaker-than-expected revenue of about $3.3 billion, up slightly from about $3.2 billion year-over-year. Total gross margin as a percent of revenues was 44.5%, an increase of 1.5%, compared with the third quarter of 2006.

Deutsche Bank Equity Research says Sun may get a lift from its recent advanced product line release, but expects x86 growth to slow further as customers wait for Sun's Intel-based x86 refresh later this summer. VMware-driven consolidation continues to pressure x86 demand, says the firm.

Deutsche Bank suggests more restructuring will be required for Sun to hit long-term margin targets. They believe it will prove difficult for Sun to grow into its existing cost structure because of the highly competitive nature of the server market.

JUAREZ -- Elcoteq will shutter its manufacturing facility here and move production to the company's plants in Monterrey and China by year-end. The EMS company will take a one-time charge of 9 million euros.

All ongoing programs in Juarez will be finished as planned, the company said.

SAN JOSE, CA – Global EMS company Sanmina-SCI Corporation today reported revenue of $2.61 billion for the second quarter ended March 31, down from $2.78 billion in the previous quarter, also down from $2.67 billion in the second quarter of 2006.

Operating income was $40.2 million or 1.5% of revenue, compared to $70.6 million, or 2.5% of revenue in the prior quarter and $66.3 million, or 2.5% of revenue in the same period a year ago. Gross profit was $139.2 million or 5.3% of revenue, compared to $169.9 million, or 6.1% in the prior quarter.

For the second quarter 2007, the company reported a net loss of $26.1 million, versus net income of $28.3 million for the first quarter, and a net loss of $76.1 million year-over year.

Deutsche Bank Equity Research states the company continues to lose share in the EMS industry. The research company also said they are encouraged by Sanmina’s focus on restructuring and decision to divest non-core operations, but believe operational miscues, restructuring charges and market share losses will likely continue indefinitely.

The research firm adds that demand from Sanmina’s communications and high-end computing customers were weak in the quarter (-12% and -11%, respectively), while demand for Sanmina-SCI higher margin PCBs and enclosures also disappointed (both down 20%).

BUDAPEST – India and China are usually at the top of the list of emerging markets. However, Eastern Europe has become the new contender in the global competition for electronics manufacturing dollars, says iSuppli Corp.

Speaking today at iSuppli’s 2007 European Briefing Series in Budapest, Greg Sheppard, chief development officer at iSuppli, discussed the outlook for electronics manufacturing in Eastern Europe.

With a population of more than 400 million people, regional GDP growth of around 5% and an annual increase in electronic consumption slightly less than 10%, it isn’t a surprise that Eastern Europe has become a hotbed of activity for manufacturing and designing everything from LCD-TVs, to desktop and notebook PCs, to mobile handsets, to consumer electronics, Sheppard noted.

Eastern Europe’s electronic system production revenue is expected to rise at a CAGR of 10.2% for the period of 2005 through 2010, says iSuppli. This compares to a negative 2.4% CAGR for the rest of Europe during the same period. Sheppard attributes this to higher education in Eastern Europe, demand from customers, and lower production costs than in Western Europe.

The region also is benefiting from the rise in tax grants and benefits from governments; these governments are striving to increase the GDPs of their countries, Sheppard said.

The number of companies throwing their hats into the LCD-TV ring in Eastern Europe is substantial. One of the reasons for this is that the barrier to entry in the LCD-TV business is much lower than it used to be, says iSuppli. According to iSuppli’s Television Systems service, the LCD-TV market is set to grow to 4.1 billion euros by 2011, from 1.7 billion euros in 2006, managing a CAGR of 19.5%. Unit volume will reach 7.3 million units by 2011, from 1.8 million in 2006, rising at a CAGR of 31.6%.

TORONTO - Celestica Inc.'s March quarter revenue was down 5% year-over-year, to $1.84 billion. The net loss was $34.3 million, about twice what the EMS supplier lost in the first quarter of 2006.

IRVINE, CA -- Henkel was named a recipient of Intel Corp.’s Preferred Quality Supplier (PQS) award for outstanding performance in providing products and services deemed essential to Intel’s success.

The company was recognized for its efforts in supplying Intel with die attach adhesives and underfill materials.

Henkel and 43 additional PQS award winners were honored at a celebration in Burlingame, CA, on March 27.

BANNOCKBURN, IL -- For Apex and Los Angeles, it’s one and done.

The Apex/IPC Printed Circuits Expo trade show will relocate to Las Vegas in 2008, show producer IPC said Monday. In a letter to exhibitors, IPC said the combination of a 12% drop in attendance coupled with an apparent distaste for the Los Angeles Convention factored heavily into the decision. Attendees, said the group in a letter issued Monday to exhibitors, said, "Los Angeles was the number 1 problem over and over again. In short, the location was not a positive experience."

IPC said the show would move to Mandalay Bay, a prominent Las Vegas casino and convention center. The timing will also change. Traditionally a February show, the 2008 edition will take place April 1 to 3.

EL SEGUNDO, CA – Global semiconductor revenue will rise to $281.4 billion in 2007, up 8.1% from $260.2 billion in 2006, according to a revised iSuppli forecast. iSuppli previously predicted 10.6% growth for 2007.

WASHINGTON, DC – AeA today released Cyberstates 2007: A Complete State-by-State Overview of the High-Technology Industry. The report shows that in 2006, the high-tech industry continued growing in the U.S., adding nearly 150,000 net jobs for a total of 5.8 million. This growth is faster than the 87,400 jobs added in 2005, says AeA. These two years of growth represent an increase of 4%. The report is based on U.S. Bureau of Labor Statistics data.

President and CEO of AeA, William T. Archey, reports, “The average tech industry wage is 86% more than the average U.S. private sector wage … in 48 cyberstates, the average high-tech wage is at least 50% more than the average private sector wage, and in 10 cyberstates this differential is [more than] 90%."

The unemployment rate for engineers in 2006 was below 2%.

The high-tech manufacturing industry added 5,100 net jobs last year. Software services and engineering and tech services employment were up for the third year in a row, increasing by 88,500 jobs and 66,300 jobs, respectively. Only the communications services industry continues to struggle, losing 13,300 net jobs in 2006, says the report.

California led the nation in net job creation, while Florida saw the second largest gain, adding 10,900 tech jobs in 2005. Florida was also the fastest growing state by rate of growth (+4.1%), followed by Virginia (+3.0%). Virginia surpassed Colorado to lead the nation with the highest concentration of tech industry workers as a percent of the private sector workforce (8.9%).

The report also found that, after dropping slightly in 2005, venture capital investment in the technology industry rose by $285 million, to $12.7 billion in 2006. R&D expenditures by high-tech companies jumped by 22% in 2004, the most recent data available, totaling $70.6 billion, a record-breaking amount of R&D.

SHANGHAI – Nepcon China, Shanghai’s largest electronics manufacturing trade show, offered some changes over 2006, but mostly more of the same.

On the plus side, attendance has been strong and steady. And next year’s show is reportedly already sold out. The downside is that there simply isn’t much in the way of new equipment or materials.

Attendance slowed Wednesday, the second day of the show, despite a noticeable uptick in the number of Westerners, observed CIRCUITS ASSEMBLY, the only U.S.-based publication here at the show this week.

ROME, NY – The Electrostatic Discharge Association has announced its annual $10,000 university research grant. Applicants may include any academic professor or researcher who wishes to conduct exploratory work in the field of ESD, including device/design, materials, test methods, or factory control methods. The grant is a one-year subsidy and will be announced in September.

The outcome of the research should advance the fundamental understanding of ESD knowledge. Researchers are required to first publish the outcome of the work at the ESD Symposium before submitting to any professional journal.

To apply, send an email to info@esda.org indicating you are applying for the research grant. A clear outline of the title, purpose, approach, and expected outcome of the work must be included. Applicants should include a 500-word summary on how the proposed work would advance the understanding of ESD. The summary should indicate how the research relates to the ESD Technology Roadmap (available at www.esda.org).

All applications must be received by June 30 to be considered.