SAN FRANCISCO -- A leading analyst today maintained its cautious outlook for providers of electronics manufacturing services.

Deutsche Bank said recent reports from major OEMs that outsource manufacturing indicate tepid and in some cases negative growth ahead for EMS firms. 

In hardware sales, IBM, a leading outsourcer, reported a 1% year-on-year increase in the fourth quarter due to slowness in its mainframes, storage and PC businesses, down from 9% sequentially. Motorola and Juniper fell on a year-on-year basis. 

Handset shipments improved as Motorola and SonyEricsson beat quarterly forecasts, although the average selling prices were lower than expectations, DB said.

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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.

Abstracts of 200 words should be submitted by April 1 to smta.org/iwlpc/call_for_papers.cfm or by email to Kristin Nafstad (kristin@smta.org).

 

 

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.