Trends & Observations - May '06

* Solectron's Nortel business has grown from a quarter ago. Meanwhile, the Flextronics-Nortel business may be experiencing some difficulty with certain programs being more difficult to bring in than previously anticipated. There is some talk whether or not total Nortel revenue contribution for Flextronics, once program transfers are complete, will equal the amount initially estimated.

* The PCB business continues to move along nicely. Better-managed suppliers are seeing higher volumes, better transition pricing, and growing backlogs. Some poorly-managed vendors are having difficulty retaining key management personnel.

* The handset industry's growth rate for 2006 has been raised to 15%, from 10%, by Nokia citing stronger than expected subscriber growth. EMS providers with reasonably significant exposure to the handset end-market include Jabil and Flextronics.

* Industry discussions reveal leadtimes for some passive components are extending. Also, there is believed to be as much as a 30% to 50% greater increase in waiting times for some ceramic capacitors. Additionally, taking into consideration companies speaking about connector requirements and concerns one may infer there could be a sense ome supply channels depending on particular components; connectors, vendors, and sourcing geographies.

VentureOutsource.com, May 2006