* Manufacturer and seller of tantalum; multi-layer ceramic, and aluminum capacitors: Kemet is on the acquisition path. This leads to some caution on the potential pricing of any deal and return on investment as the global passive industry is currently peaking and there appears to be plenty of capacity coming online by Asian companies in ’07 which will place more pressure on global pricing, factory utilization rates, and business segment profitability
* Telecom infrastructure demand is weakening. While there are some positives from Cisco in the sector, many components suppliers find it difficult to find high points in other programs.
* Chinese handset brands softened near calendar year-end. Chinese brand handset are still positioned to grow 12 to 15% from previous quarter. In related, the handset co-processor market is anticipated to grow almost 20% year/year.
* Discussions with EMS providers and other in the supply chain reveal inventories in the electronics contract manufacturing sector appear to be trending upward. Reasons point to distributors and other intermediaries since most contract manufacturers are vigilant about managing inventories.
* Venture Outsource added two more lean outsourcing seminar dates. Titled, Lean Outsourcing – Profiting from Global Operations, the events are designed to help companies protect profits and develop more efficient supply chains. Eric O. Olsen, Ph.D. instructs the seminars. Dr. Olsen also works closely with the University of Toyota, Toyota’s corporate training facility for North America. More is available on the VentureOutsource.com Website.
* The build for consumer electronics is winding down from the holiday season. Some of the electronics contract manufacturers with noteworthy amounts of build for consumer electronics include Celestica and Jabil
* The PCB book-to-bill ratio, what some view as one of the leading indicators for technology demand, has declined two of the last three months. While not alarming, this could signal a trend the industry is heading into softer territory.
VentureOutsource.com, January 2007
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