News
SAN JOSE - Sanmina-SCI on Thursday reported first-quarter revenues rose 9.5% to $3.25 billion, at the low end of previous company guidance, and the EMS firm announced yet another series of factory closures.
For the period ended Jan. 1, the company reported GAAP net income of $24.4 million, up 54.5% over last year. Operating income was up 29% to $59.6 million.
Sanmina-SCI said it will further reduce manufacturing capacity in high-cost regions and will take an additional $75 million restructuring charge on top of charges of $100 million announced last July. This was the 16th straight quarter Sanmina took charges for restructuring.
In a press release, chairman and chief executive Jure Sola said, "Revenues for the quarter were at the low end of our expectations as our customer end-markets experienced competitive pricing pressures and a sluggish business climate."
The company had record inventory turns of 12.3.
The firm guided for second-quarter revenue of $2.85 billion to $3.15 billion
TORONTO -- Celestica, the world's third largest EMS company, reported a GAAP net loss of $810 million, primarily due to non-cash writedowns for asset impairment and a $161 million charge to cover a potential default by a leading customer. The company said it would close plants in higher-cost regions to improve capacity utilization.
The results marred an improvement in sales. Fourth-quarter revenue was $2.3 billion, up 22% year-on-year and 7% sequentially.
For the same period last year, the company reported a loss of $8 million.
Overall, the company took one-time charges of $836 million. Celestica recorded restructuring charges of $45 million for previously announced actions.
NEENAH, WI -- Plexus Corp. today reported record revenues of $287.5 million for the quarter ended Jan. 1, up 21% over last year.
The company, which provides EMS services, reported net income of $3 million, including $900,000 in restructuring and impairment costs.
The company guided for revenues between $280 million and $290 million in the second quarter. Anticipated capital spending will be $25 million to 28 million for the year.
"Based on current end-market demand and the strength of our new business pipeline," president and chief executive Dean Foate said, "we are increasingly confident about achieving the high-end of our 15% to 18% revenue growth target for the full year."
Foate said profits were affected by theft and failure to comply with inventory control of "high-value parts" in its Mexico facility.
On a conference call Wednesday morning, the company said it while it is ramping engineering capability in Malaysia, it has "no active plans" to further consolidate other North American facilities."Our ability to provide close to home project management while leveraging lower cost (manufacturing) in Asia is turning out better for our customers," the company said.
By industry, wireline and networking made up 39% of sales, wireless infrastructure 11%, medical 31%, industrial and commercial 14%, and defense 5%.
The firm's top 10 customers comprised 60% of sales during the quarter, up from 55% sequentially. Juniper Networks (20% of sales) and GE (11%) were the two largest customers.
Inventory increased sequentially by $25.3 million, to $198.8 million, while annualized inventory turns decreased to 5.3 turns this quarter from 5.8.
Reuters reported today that the Kurdistan Workers Party (PKK) set fire Monday to a Beko Elektronik warehouse in Beylikduzu, outside Istanbul,.
According to a ranking Beko official, damage from the fire was more than $5 million and between 30,000 and 35,000 products were lost -- around half of them television sets.
Beko is a subsidiary of industrial group Koc Holding. Last year the company made more than six million TVs, making it one of the top producers in Europe, Reuters said.
The PKK has engaged in armed battles for an ethnic homeland since 1984.
U.S. federal agencies are reviewing the case on grounds of national security. At issue is Lenovo's announced plans to send Chinese computer experts and researchers to IBM's North Carolina facility, said Enterprise Security Today.
That announcement is creating some consternation at high levels in the U.S. government. Some members of the Committee on Foreign Investments in the United States are questioning whether the relocation would open the U.S. to potential acts of industrial espionage.
The CFIUS' role is to review corporate deals that involve
foreign firms to determine whether any national security threats may
arise. The
CFIUS includes the Defense Department, the U.S. Trade Representative's
office and the Commerce Department.
One analyst said concerns over the possible breach in security are warranted.
Laura DiDio, an analyst with Yankee Group, was quoted as saying, "China is a still a Communist nation. ... They're very closed,
despite these deals, and they sell stuff to people we consider enemies.
So there's a real fear here, and it's not unwarranted."
WEST CHICAGO -- The outlook for sales of connectors remains unchanged: growth of 6 to 8%, according to a leading industry research firm.
However, Bishop & Associates says peak demand in the first half of 2004 raises the bar for those numbers to be reached.
Sales growth in 2005 "will require good demand foer electronics products.... Frankly we are a little concerned," the company said in a recent report.
Order growth has slowed, having declined in October and November. The November book-to-bill -- the most recent month for which data are available, was 1.0, below the year-to-date average of 1.02.
"We envision a scenario in which the first half of 2005 will be flat to the first half of 2004," Bishop said. "If 2005 starts slowly, we believe full year growth in 2005 will be difficult to achieve."
Through November, orders were up 22.2% for the year. November orders slipped 2% sequentially.
Shipments were up 22.9%, the 25th straight month of year-on-year gains.
MINNEAPOLIS - The SMTA seeks papers for its November International Wafer-Level Packaging Congress and Exhibition.The event takes place Nov. 3-4 in San Jose.
Called the IWLPC, the event focuses on leading-edge IC packaging and test technologies with special emphasis on 3D stacked packaging.
The event is also sponsored by Chip Scale Review.
TEMPE, AZ - Three-Five Systems will consolidate its U.S. electronics manufacturing and corporate functions into one location and is exploring possible contraction overseas as well, the company said today. The moves are being made to reduce overhead and excess factory capacity.
TFS, which supplies EMS services, will close its plant in Tempe early this year and move all operations to its Redmond, WA, site. The company did not indicate how many employees would be affected.
The company also said CFO Jeffrey D. Buchanan will resign to remain in Tempe. The firm named James E. Jurgens as interim chief financial officer.
The company also announced that it is exploring opportunities to consolidate its operations in Manila, Philippines. TFS is "working closely" with its principal customer in Manila while also exploring the potential sale of the factory.
TFS lost $47 million on $164 million in sales during the 12 months ended last September.
In a written statement, president and CEO Jack Saltich said, "[S]treamlining operations and driving costs to their lowest possible level are imperative to remaining competitive. While profitability will only be accomplished through a combination of revenue growth and the changes I am announcing today, these actions are a necessary step in that direction."
On Dec. 31, in a move that forecast TFS' announcement, the company sold the building in Tempe that housed its headquarters.
The consolidation is expected be completed during the second half of 2005. TFS currently performs low-volume EMS, prototype and medical manufacturing operations in Redmond.
Several U.S. sales, marketing and engineering support centers will remain intact.
Jurgens was chief financial officer at Ziatech Corp., a privately held developer of embedded computers for telecom applications, which was purchased by Intel in 2001. TFS said other commitments preclude Jurgens from taking the position on a permanent basis.
The company tabbed James P. McClintock, president and chief operating officer, and David E. Gable, vice president and chief financial officer, to handle CEO responsibilities on an interim basis.
The board is actively seeking a new CEO.
Last week the company posted wider-than-expected losses of $38.9 million amid declining revenues and inventory problems.
The 101,000 sq. ft. Wylie plant is home to Lone Star Circuits, which IPS acquired last November in what is considered a reverse takeover.
The company said it would close its PC Dynamics manufacturing plant located in Frisco, TX. PC Dynamics is a wholly owned subsidiary of IPFS.
The firm said it has begun duplicating processes at its Wylie site and should have all of the new lines running within the next eight weeks.
Robert LaGuerra states that differing factors around the world are driving this growth for automotive-specific semiconductors. For example, in Europe and Asia, smaller engines are the norm and there is a defined need to match their performance with those of larger displacement engines. To maximize the performance of these smaller engines, advanced engine management technologies including displacement on demand, variable valve timing and direct fuel injection are being aggressively rolled out in these regions.
The same is happening in the U.S., although this is predominantly due to rising fuel costs and CAFE standards. More specifically, new government legislation mandates that automakers must implement advanced airbag safety systems and tire pressure monitoring systems into future car lines.
LaGuerra cautions, "Automotive processors are proliferating, but in some applications adding too many components that are intended to make the car more reliable, may actually reduce reliability." He adds that in some situations, the industry will actually look to simplify things using fewer, heavier-duty processors.
Abstracts of 200-300 words are due to conference coordinator Kristin Nafstad (kristin@smta.org) by March 1. Written papers are not required.
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