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Strategies & Market Trends : Electronic Contract Manufacture (ECM) Sector -- Ignore unavailable to you. Want to Upgrade?

To: Brendan W who wrote (855)	11/10/1997 12:37:00 PM
From: 18acastra	Read Replies (2) \| Respond to of 2542

SCI & Solectron are larger, but due to the econmics of the industry have no scale advantage (over $1.5bb+ is enough). Actually, there are disecomomies of scale associated with their size: they are so big because they do a lot of PC related business which is low value added. FLEXF and JBIL have meaningful % chunks of their business in Telecomm & Datacomm (and almost 0% in PCs). One of Flextronics largest customers is Advanced Fiber Communications (AFCI, look at stock chart and multiple relative to FLEXF), which is growing at over 100% a year. Flextronics gets all of that business. Also having guys like Cisco, etc. as meaningful pieces of your customer base is good because you get good organic growth from the growth of their products, as opposed to having to win big new chunks of business. Sanmima (SANM) is a good example of what the grow along with your customer base srategy can do for you if you are strategically linked to the right telecomm and datacomm players. My opinion.