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Electronics Production | November 24, 2009

5Q/5A: Flextronics Germany answers our questions

Exclusive: Today's Q&A was answered by Michael Kayser, Senior Director Business Development at Flextronics' SBS unit in Paderborn (Germany).


• Where do you see the European EMS-industry in the next 2-3 years? On the one hand we expect to see a shakeout of the European EMS market over the coming years in the wake of the current market downturn. On the other hand more and more OEMs either having underutilized capacity in place or being forced to invest in equipment in order to cope with a growing market will start to raise the “Make or Buy” question again. So the European EMS industry will continue growing in the next years. Flextronics Special Business Solutions, offering tailored services to customers with complex, high-diversified business – very often a typical business in Europe – will support this growth by its fully integrated network of regional manufacturing facilities around the world. • Which segment provides the highest growth potential for you as an EMS-provider? In general and especially for Germany all type of Industrial Electronics is a growth potential for EMS. Typically OEMs in this market continue to design and manufacture in Europe. A high degree of automation in various areas, a clear trend to implement more and more self service solutions in our daily life and a huge demand for renewable energy opens a wide spectrum of engagements in terms of design and manufacturing services for printed circuit board assembly, system integration and build to order/configure to order type of products. • Where do you see your own competitors? We are facing competition both regional and global. Just in Europe the numbers of regional competitors in particular countries is enormous; among those Germany might have the highest density of EMS providers all over Europe. Having the unique Industrial Park concepts in place for high volume/low mix and offering Special Business Solutions for low volume/high mix Flextronics is well prepared to cope with these challenges. We always act local near to and in conjunction with our customers while thinking global. • Is becoming an ODM-company the way to go for EMS-providers? As obvious in our value proposition DESIGN.BUILD.SHIP.SERVICE design activities are an integral part of Flextronics’ service offerings. The bandwidth of activities in this area is very broad – from supporting services to joint development up to ODM. Yes, we can recognize demands for ODM in some markets and we are already supporting some of them. In general cooperation of OEMs and EMS providers in the area of design enables short time to market while building in efficiency and quality of production and competitive product cost. • How would you define the relationship of EMS-provider and OEM customer? Many of the OEMs have recognized the need to focus on what they do best – product and market development while embracing the advantages of working with EMS providers to create the right supply chain for their business model. Early involvement of the EMS provider as well as a trustful and long term partnership between both parties is the enabler to achieve the most benefits of this teeth (or better collaborative?) way of working, which provides full leverage of each others’ business model to both the OEM and the EMS provider.
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