Electronic Contract Manufacture (ECM) Sector Message Board

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Strategies & Market Trends : Electronic Contract Manufacture (ECM) Sector

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To: kolo55 who wrote (2020)	4/20/1999 6:22:00 PM
From: 18acastra	Read Replies (1) of 2542

People need to understand (and they currently don't) that Sanmina is a very different business than JBL/FLEX etc. SANM is primarily a backplane player, and that industry is predominently outsourced, so they now rely primarily on customers organic growth (and backplanes go into a lot of high growth stuff) as opposed to the general trend to outsourcing and winning giant new programs. As indicitive of the difference, when is the last timme anyone heard about a SANM giant new customer win? Also, look at SANM margin %, much higher than anyone else as they are getting paid for higher value-added backplane fabrication. BTW, the backplane market is much smaller (maybe 1/1000) than the overall market available to contract mfgs. like JBL and FLEX. So it may be that the limits of the market size that SANM plays in is finally catching up to them (two dicey Q's out of last 4). SANM is a great company, but in my opinion will not be able to sustain 30%+ growth like the other guys for the next 5 years. FOr this reason (and valuation), have always owned JBL/FLEX as opposed to SANM. JMHO.

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