Circuits Assembly Online Magazine - News

News

SAN JOSE, CA – Worldwide sales will surpass $321 billion in 2010 with a CAGR of 7.7% for the period between 2007 and 2010, the Semiconductor Industry Association today reported in its annual forecast of global semiconductor sales.

EL SEGUNDO, CA – Pricing has become the paramount concern for television makers, as the growing emphasis on achieving the lowest possible cost has brought wrenching changes to the competitive landscape and manufacturing structure of the business, says iSuppli Corp.

HONG KONG – Surface Mount Technology (Holdings) LTD. reported second-quarter revenue of HK $758,436, up 7% year-over-year.

Year-to-date revenue, ended Sept. 30, was HK $1.58 million, up 11.5% compared to the same period in 2006.

Gross profit for the second quarter was HK $108,773, an increase of 4.7% year-over-year, while gross profit in the first half of the year was HK $214,599, up 3.9%, the company said.

SMT said the growth in gross profit is lower than revenue growth mainly as a result of higher cost of sales resulting from higher raw material prices, wages, energy cost and depreciation charges.

US $1 = HK $7.7851

TAIPEI, TAIWAN – Arima Computer reported it will sell its notebook and server-related businesses to EMS provider Flextronics for $192 million.

Flextronics will procure all stocks of Arima's subsidiaries in Japan, Texas and California, and the UK for an extra $59.5 million.

The transaction is expected to be completed in the first quarter of 2008, Arima said.

Currently, Arima's clients, including HP and Dell, contribute around 330,000-350,000 units to notebook shipments each month, said the company.

Flextronics should expand the production capacity up to 500,000 units initially after the take over, while mass production will begin in the later half of 2008, Arima stated.

No other terms of the agreement were disclosed.

PRAGUE – The global semiconductor market is expected to grow 3.8% on an annualized basis to $257.2 billion in 2007, according to the autumn forecast of the World Semiconductor Trade Statistics.

ELKHART, IN – CTS Corp. announced plans to realign certain manufacturing operations and eliminate approximately 103 net positions during the fourth quarter.

The realignment is intended for inclusion of manufacturing support functions at locations serving more than one business, the company says. In addition, certain production lines are slated for transfer.

These actions will result in a pre-tax restructuring charge and related costs of approximately $3 to $3.5 million, with the majority representing severance-related expense, reports CTS.

Approximately $2.8 million of the total expected cost is anticipated to be taken in the fourth quarter, with the remainder to be recorded in the first quarter of 2008, CTS says.

Breakeven on the realignment is expected in about one year, with annualized pre-tax savings projected to approximate the cost of the actions.

YAVNE, ISRAEL – Valor Computerized Systems announced year-to-date revenues of $31.4 million, an increase of 17.5% year-over-year.

Net profit year-to-date was $2.2 million, a decrease of 9% year-over-year.

Third-quarter revenues reached $10.6 million, an increase of 15.2% compared to the same quarter in 2006.

CFO Dan Hoz said, “Business conditions in Q3 were in line with our expectations. We witnessed a strong positive cash flow, resulting from a robust collection of account receivables ... ”

President and CEO Ofer Shofman said, “ … We signed an OEM partnership agreement with Universal Instruments Corp. … We are already working to deliver similar agreements over the next quarters.

“We have recently signed a distribution agreement with one of the largest EDA solution distributors in Europe … “ he added.

SAN FRANCISCO – Despite GDP growth in the third quarter, Deutsche Bank Equity Research expects the economy to slow materially to 1% in the fourth quarter because of follow-on effects of tighter credit conditions.

The bank also predicts the economy will improve to 2.1% in 2008.

This, in isolation, should drive slower IT capex growth during the next 6 to 9 months, the company says.

Further, the credit crunch (and associated losses posted by large financials) will likely exacerbate weaker near-term IT capex, as a result of high exposure to the financial vertical.

Over the past several years, IT spending has been tracking +5 - 7% year-over-year, Deutsche Bank says. The company adds that 2008 IT spending could slow to +2 - 4%. After last week's pullback, valuations across the sector are beginning to reflect slower growth.

There is a strong correlation between IT spending and GDP, the company says. Deutsche Bank believes near-term macro concerns will translate into decelerating IT spending growth in 2008. That said, IT spending growth has consistently outstripped growth of the economy over the past 5, 10 and 15 years by an average of 3x, as IT spending has increased from <1% in 1990 to 6% of GDP today, the firm continues.

Data from the Bureau of Economic Advisors shows real US GDP growth was 4% year-over-year in the third quarter, while IT spending (hardware and software) decelerated to 6% compared to the third quarter last year.

Third-quarter earnings results suggest softness in IT spending with declines in discretionary IT spending, particularly in the financial vertical.

IT spending within the financial sector represents approximately 18% of total IT spending and 13% of total hardware spending, the company says.

Due to the relatively high exposure of IT spending to the financial vertical, weaker spending among this customer base will likely have a material impact on overall spending. A 5% decline in this group's spending translates to a 1-point decline in IT spending, in isolation. More realistically, other economically sensitive verticals will also likely slow IT spending due to concerns of a weakening economy.

CARLSBAD, CA – Mydata Automation, a manufacturer of SMT process equipment, has signed a license agreement with Nordson Corp. involving patents for jetting processes developed by Asymtek, provider of coating, dispensing and jetting technologies.

Mydata will use this technology in its jet printer products designed for SMT applications.

TORONTO – EMS provider SMTC Corp. reported revenue of $54 million in the third quarter, down nearly 18% year-over-year, and down 18.3% sequentially.

The company recorded a net loss of $1.2 million, compared to a net income of $6.1 million in the third quarter last year.

ITASCA, IL – ITW subsidiaries Kester and Speedline Technologies will co-demonstrate certain technologies during Productronica this week.

Kester will showcase the new Speedline printer, Momentum, while Speedline will feature certain Kester interconnecting materials.

The show takes place Nov. 13-16 at the Munich Trade Fair Center.

Kester materials featured in Speedline’s booth include EnviroMark 919G no-clean and 828 water-soluble pastes, K100LD alloy for wire and bar, TSF and flux in both lead-free and SnPb versions. Kester also is providing materials for Speedline’s demonstration room in Germany, and the companies will cooperate on product training.

NEWARK, NY – IEC Electronics Corp. announced revenue for the fourth quarter was $9.6 million, up 15.6% year-over-year.

Fourth-quarter net income was $296,000, down nearly 16% compared to the same period in 2006.

For 2007, IEC reported net income of $875,000, up 75% year-over-year. Revenue was $40.9 million, an increase of 44.7% compared to 2006.

CEO W. Barry Gilbert said, “The fourth quarter was negatively impacted by significant product design and test issues related to programs from two new customers, and by inefficiencies associated with the influx of recently hired employees. We estimate that the combined effect of these issues on the quarter’s results was approximately $1 million in sales and upwards of $300,000 in pretax earnings, which we hope to recover during the current fiscal year ... We expect the impact of design and test issues on quarterly performance to lessen as we assimilate the new customers’ products and experience revenue growth.

The military and industrial sectors, respectively, represent 36% and 33% of sales for fiscal 2007 compared with 23% and 25% of sales for fiscal 2006.

… we expect our sales to increase by more than 20% and earnings to increase by as much as 70% from fiscal 2007.”