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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (53039)	9/24/2001 9:41:45 PM
From: Proud_Infidel	Respond to of 70976

Is light peaking through the tunnel of contract manufacturing? Semiconductor Business News (09/24/01 18:23 p.m. EST) FRAMINGHAM, Mass. -- Contract systems manufacturers--such as Solectron, Flextronics, and Celestica--will see another 10% sequential drop in revenues during the third quarter, said International Data Corp. today, but the research firm also believes it could be seeing "light" at the end of downturn tunnel. Worldwide revenues for contract electronics manufacturing are expected to total $20 billion in Q3, down from about $22 billion in Q2, according to IDC. However, the research firm said it continues to expect a surge in contract manufacturing services during the next four year, pushing worldwide revenues to $230 billion from $103 billion in 2000. While contract manufacturers are tightening their belts, many are also using the downturn to "accelerate their long-term plans of targeting specific growth areas, such as wireless and optical segments or to position themselves for the economic recovery," said analyst Kevin Kane, program manager of IDC's Contract Manufacturing Services service. Solectron Corp. of Milpitas, Calif., remains the world's largest contract systems manufacturer with about 21% of the segment's revenues, said IDC. Singapore-based Flextronics International Ltd. has 12% of the contract manufacturing services (CMS) revenues while Celestica Inc. of Toronto has 10% of the CMS business, according to IDC. Many of the contract manufacturers have expanded design and semiconductor purchasing services in addition to moving into cellular phones and communications systems technologies. "The current move to vertical and virtual integration in the CMS industry will allow the CM vendor to further penetrate the product development cycle and, ultimately, strengthen the relationship between the CM vendors and the branded system suppliers," IDC's Kane said.