Electronics Production | January 28, 2010

Flextronics: Infrastructure is largest single segment

"Our largest single segment, Infrastructure, grew 7% sequentially off of what we believe was a bottom in the September quarter and this growth also exceeded our internal revenue forecast", states Flextronics' CEO Mike McNamara.
Infrastructure sales came in at $1.75 billion, representing 27% of revenue. The growth in this segment was driven by new customer wins and a general strengthening of the economy. Flextronics was able to compensate a large portion of its Nortel Business - its CDMA wireless business going to Ericsson and its Enterprise Solutions Business going to Avaya - with two key strategic accounts.

Mr McNamara also stated that the recent sale of Nortel's optical business to Ciena is viewed positively and that the EMS-provider is "developing a strong working relationship with Ciena and will provide excellent service to them as the product lines transition ownership".

The Computing segment represented $1.3 billion or 20% of sales. This segment was up 20% sequentially as Flextronics notebook production achieved a $1.5 billion run-rate in the quarter. The ODM-business will - in future - not only include the notebook business, but also the netbook and desktop (All-in-One) businesses.

"We remain encouraged by the breadth of design wins we’ve been receiving and we continue to expect significant growth in our ODM computing business in fiscal 2011, especially in our September quarter when new designs get launched to market in time for the back-to-school selling season", he continued in saying.

The high-mix, low-volume segments - Industrial, Automotive, Medical, and Other - saw modest sequential growth during the quarter, rising 4.4% - comprising 18% of total sales, down slightly from 19% last quarter.

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Mobile sales rose 29% sequentially to $1.4 billion, or 22% of total revenue. The sharp increase was largely driven by continued growth with a key smart phone customer as well as other new mobile phone launches with strategic customers in Japan and China. Revenue erosion from Sony-Ericsson has moderated and this customer now accounts for less than 2% of Flextronics' total sales. "Customer diversification efforts will continue to strengthen this segment", the CEO continues.

Consumer Digital rose just over 2% on a sequential basis in December on the back of a 34% seasonal sequential increase last quarter. The segment ended at $886 million or 13% of total sales. The continued growth in this segment was primarily driven by the ramp of a major LCD TV program with LG in Mexico as well as new printer ramps for HP in China.


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