* Plexus continues its remarkable turnaround. Following recent performance, the Company now ranks among the top tier in margins, returns, and growth. One of the Company’s more pressing concerns now is likely to be customer diversification since it depends largely on two top customers.
* Asustek is benefiting from economies of scale with its ODM business and will likely show incremental growth in ’06 from its acquisition of Askey and joint venture with Advantech. The company’s strong branding for quality notebooks, PCs, motherboards, handsets, and other products continues to help overall Company performance.
* Celestica reported disappointing financials for Q3. Its European operations continue to show a loss that increased over the previous quarter. VO believes European profitably is still nine to twelve months away depending on how European restructuring and execution unfolds.
* Sanmina-SCI reported declining margins in its components business. Many believe this segment is the key to Sanmina-SCI’s recovery to healthy margins. Meanwhile, in addition to a 2% decline in revenues, the Company reported a 7% increase in inventories over the previous quarter. INsight believes this inventory concern could reflect a wider trend of OEMs pushing greater materials liability onto EMS providers.
* Jabil loaned $25 million to an EMS provider serving the South Asian market, with an option to acquire the company at a future date. In the Company’s recent 10K filing, Jabil mentions this potential acquisition could close in 2006. Jabil’s footprint in low-cost regions accounts for roughly 62% of capacity.
VentureOutsource.com, November 2005
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