Flextronics tenders friendliness to Taiwan’s ODMs
By Jason Tan
Flextronics, the world’s top electronics manufacturing services (EMS) provider, is attempting to turn rivalry with Taiwanese manufacturers of original design (ODMs) into partnership.
“We are trying to work with major companies here and our business is growing well in Taiwan,” stated Michael Marks, its chief executive officer, at a press briefing yesterday.
Marks, who has announced to retire in next January and assume the post of chairman of board of directors, is reportedly in town to meet with local technology players for possible partnerships.
One high-profile client includes Asustek Computer, Taiwan’s largest computer motherboard maker, Chinese-language newspapers here reported. Marks, however, declined to comment and said that it was purely media speculation.
In its fiscal 2006 ending next March, Flextronics is eyeing to achieve US$400 million in business sales with Taiwan’s companies.
This figure is four-fold from the US$100 million recorded in fiscal 2005, and a drastic leap compared to merely US$15 to 20 million in 2004.
According to Marks, Flextronics does not have plans to compete head-to-head with Taiwan’s ODMs in the PC space, such as motherboards, where Taiwanese vendors have built a firm foothold. It however intends to work with them and supply mechanical components to these vendors.
Currently, handset assembly is the largest revenue driver to Flextronics, contributing around 33 percent to its total revenues. Sony Ericsson is one of its largest customers, he revealed.
The EMS giant bought Finnish GSM handset design house Microcell in 2003 and Korean-based CDMA handset outfit G-Tran a year later. With the acquiring of both handset communication platforms, the company is slated to ship CDMA/GSM dual-mode phones this year, informed Peter Tan, Flextronics Asia’s president and managing director.
Recent reports from Business Week indicate that Foxconn, the brand name of Fletroxincs’ closest competitor Hon Hai Precision Industry, is voted as the world’s No. 2 IT company. The rivalry between Hon Hai and Flextronics is getting intensive nowadays to compete for the EMS pie.
“It is not a zero sum game between Flextronics and Hon Hai. Most of our products do not overlap with each other and we have different areas we excel at,” Marks stated.
He added that the two companies should not be compared based on revenues growth. Though Flextronics’ revenues are comparatively lower, it has posted higher profit growth.
Flextronics expects to reap total revenues of US$16.5 billion in fiscal 2006, a slight increase from US$15. 9 billion of the previous year. It achieved 50 percent of profit growth in fiscal 2005, and is aiming for 30 percent growth in 2006.
On the contrary, Hon Hai’s revenues jumped 34 percent to NT$541.6 billion last year, with profit growing 18 percent year-on-year.
Flextronics, the world’s top electronics manufacturing services (EMS) provider, is attempting to turn rivalry with Taiwanese manufacturers of original design (ODMs) into partnership.
“We are trying to work with major companies here and our business is growing well in Taiwan,” stated Michael Marks, its chief executive officer, at a press briefing yesterday.
Marks, who has announced to retire in next January and assume the post of chairman of board of directors, is reportedly in town to meet with local technology players for possible partnerships.
One high-profile client includes Asustek Computer, Taiwan’s largest computer motherboard maker, Chinese-language newspapers here reported. Marks, however, declined to comment and said that it was purely media speculation.
In its fiscal 2006 ending next March, Flextronics is eyeing to achieve US$400 million in business sales with Taiwan’s companies.
This figure is four-fold from the US$100 million recorded in fiscal 2005, and a drastic leap compared to merely US$15 to 20 million in 2004.
According to Marks, Flextronics does not have plans to compete head-to-head with Taiwan’s ODMs in the PC space, such as motherboards, where Taiwanese vendors have built a firm foothold. It however intends to work with them and supply mechanical components to these vendors.
Currently, handset assembly is the largest revenue driver to Flextronics, contributing around 33 percent to its total revenues. Sony Ericsson is one of its largest customers, he revealed.
The EMS giant bought Finnish GSM handset design house Microcell in 2003 and Korean-based CDMA handset outfit G-Tran a year later. With the acquiring of both handset communication platforms, the company is slated to ship CDMA/GSM dual-mode phones this year, informed Peter Tan, Flextronics Asia’s president and managing director.
Recent reports from Business Week indicate that Foxconn, the brand name of Fletroxincs’ closest competitor Hon Hai Precision Industry, is voted as the world’s No. 2 IT company. The rivalry between Hon Hai and Flextronics is getting intensive nowadays to compete for the EMS pie.
“It is not a zero sum game between Flextronics and Hon Hai. Most of our products do not overlap with each other and we have different areas we excel at,” Marks stated.
He added that the two companies should not be compared based on revenues growth. Though Flextronics’ revenues are comparatively lower, it has posted higher profit growth.
Flextronics expects to reap total revenues of US$16.5 billion in fiscal 2006, a slight increase from US$15. 9 billion of the previous year. It achieved 50 percent of profit growth in fiscal 2005, and is aiming for 30 percent growth in 2006.
On the contrary, Hon Hai’s revenues jumped 34 percent to NT$541.6 billion last year, with profit growing 18 percent year-on-year.
posted by jason tan @ 9:31 PM
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