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Electronics Production | July 21, 2006

Flextronics in - who will be kicked out from Juniper?

Flextronics recently received a manufacturing contract from Juniper Networks. The question is how will this affect Juniper's other EMS providers.
Flextronics has landed a manufacturing contract from Juniper Networks under which Flextronics will manufacture its security and networking products. The contract is worth approximately $350 million in calendar 2007.

How this deal will affect Juniper's relationships with Plexus and Celestica is yet unknown. Today these two EMS providers split the business evenly.

According to Carter Shoop, an analyst with Deutsche Bank, Juniper is most likely to move production from Plexus and Celestica to Flextronics over the next six months, and then trimming one of the vendors from its supply chain.

"We believe Plexus has done a superior job servicing Juniper and has the inside track to keep the business, but expect Celestica's to aggressively try to retain the program," Shoop told circuitsassembly.com.

Juniper is according to Shoop a big customer at plexus contributing to 20% of Plexus sales but the company represents roughly 4% of Celestica's sales.

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