Industry Pulse - Sep '05

* Venture Outsource is presenting online, international, instruction on electronics outsourcing contracts strategy and tactics October 4th. The event is sponsored by Avnet and Sanmina-SCI. Toll-free dial-in for 17+ countries. For more details, visit: http://www.ventureoutsource.com/docs/webinar/contracts.html

* BenQ reported margins below expectations. Pricing pressure across all product lines, US channel inventory write-offs, handset division operating losses, and high overhead are believed to have each contributed to the Company's financial performance.

* Asustek anticipates a good holiday season. This is partially based on market share gains with their branded motherboards and notebook PCs. The Company also cites improving MP3 ODM orders and announced it will outsource 20% of its own-brand motherboard business to Flextronics.

* Hon Hai reported financials for its EMS division. Excluding handsets and vertical businesses, revenues for six months ending June ‘05 came in 58% over same period 2004 making the Company the largest EMS provider in the first half of the year. Relative to its US EMS peers, Company margins are no longer competitive and lag behind significantly in some cases proving management of large capex-intensive business models can be challenging.

* Flextronics is increasing new product introduction (NPI) builds with Nortel at its Montreal location. There is reason to believe these products incorporate Flextronics-manufactured components which will result in higher PCB margins.

VentureOutsource.com, September 2005