PEMSTAR To Complete Previously Announced Restructuring Initiatives.

ROCHESTER, Minn. -- Company to Close Taunton, Mass., and Hortolandia, Brazil, Facilities; Will Take $4.0 Million Charge in the December Quarter

PEMSTAR Inc. (Nasdaq:PMTRE), a leading provider of global engineering, product design, manufacturing and fulfillment services to technology, industrial and medical companies, today announced that it will complete ahead of plan the restructuring program it announced and began in October. On December 3, 2004, the officers completed their determination of actions to take to reduce excess manufacturing capacity and announced these actions to the remaining affected employees. PEMSTAR will integrate management of its sites in Dunseith, N.D., Chaska, Minn., and Rochester, Minn., into one virtual operational entity, with shared general management and support services. As part of the management integration, PEMSTAR will also eliminate surplus space at both its Chaska and Rochester locations. The company will discontinue operations at its facilities in Taunton, Mass., and Hortolandia, Brazil.

As a result of these restructuring steps, PEMSTAR will incur fiscal third-quarter charges for future lease costs of ($1.8 million), employee severance costs of ($0.2 million), fixed asset write-downs of ($1.5 million) and other wind-down costs of (up to $0.5 million). Of these charges, approximately $1.5 million are expected to be non-cash. In addition, these actions may result in contract end-of-life costs, not expected to exceed $0.4 million, for customer projects which are not transferred to other available production capacity.

"We implemented this restructuring program to enhance future margins," said Greg Lea, executive vice president and CFO. "We initially anticipated that these steps would occur over the December and March quarters. However, by taking quick and decisive actions, we're completing the restructuring in the December quarter, ahead of plan. We expect that our actions will yield at least $5 million in annual savings, and improve utilization as well as streamline domestic operations, while maintaining our global capabilities. PEMSTAR anticipates that savings will start in the March quarter."

As reported earlier, PEMSTAR is eliminating approximately 190,000 square feet of manufacturing space, or approximately 20 percent of North American capacity. These reductions will complete the company's previously announced domestic workforce reduction of approximately 5 percent, or 75 to 100 people. Management does not expect any additional charges beyond the fiscal 2004 third quarter related to this restructuring.

Mexico Update

As announced on November 3, 2004, PEMSTAR is conducting a review of certain accounting discrepancies related to its Guadalajara, Mexico, facility. The company has turned over the results of the inquiry to PEMSTAR's current and former independent audit firms. The audit firms are diligently working toward a resolution to determine the impact on the company's financial results.

About PEMSTAR

PEMSTAR Inc. (www.pemstar.com) provides a comprehensive range of engineering, product design, manufacturing and fulfillment services to customers on a global basis through facilities strategically located in the Americas, Asia and Europe. The company's service offerings support customers' needs from product development and design, through manufacturing to worldwide distribution and aftermarket support. PEMSTAR has over one million square feet in 14 locations worldwide.

This press release may contain "forward-looking" statements. These forward-looking statements, including statements made by Mr. Lea, may contain statements of intent, belief or current expectations of PEMSTAR Inc. and its management. Such forward-looking statements are not guarantees of future results and involve risks and uncertainties that may cause actual results to differ materially from the potential results discussed in the forward-looking statements. In addition to factors discussed above, risks and uncertainties that may cause such differences for PEMSTAR include but are not limited to: recession or decline in economic conditions; rumors or threats of war; actual conflicts or trade disruptions; trade disruptions resulting from world health alerts or actual disease outbreaks; changes in demand for electronics manufacturing services; changes in demand by major customers due to cancellations, reductions or delays of orders; shortages or price fluctuations in component parts; difficulties managing expansion and integrating acquired businesses; increased competition; the outcome of the investigation currently being conducted at the Company's Guadalajara, Mexico facility and other risk factors listed from time to time in PEMSTAR's Securities and Exchange Commission filings, including but not limited to risks as included in Exhibit 13.1 of PEMSTAR's Annual Report on Form 10-K for the fiscal year ended March 31, 2004.