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Nortel networks to transfer supply chain operations to Flextronics.

Electronics manufacturing services (EMS) provider Flextronics (Singapore, www.flextronics.com) has signed an agreement with Nortel Networks (Brampton, Ontario, Canada, www.nortelnetworks.com) whereby Nortel will divest certain optical, wireless and enterprise manufacturing operations and optical design operations to Flextronics.

Subject to closing the four-year manufacturing agreement, Flextronics will assume most of Nortel Networks' systems integration activities, final assembly, testing and repair operations, along with the management of the related supply chain and suppliers. Over time, Flextronics expects to consolidate and internally source its vertically integrated supply chain solutions, which include the fabrication and assembly of printed circuit boards and enclosures, as well as logistics and repair services.

Through an optical design services agreement, Flextronics will acquire a group of engineers with expertise in end-to-end, carrier grade optical network products. The design and engineering skills to be transferred to Flextronics include hardware development, software development and project management.

As part of the transaction, approximately 2,500 employees will transfer to Flextronics. The business transfer to Flextronics is expected to begin in November 2004 and will take approximately six months to complete. During this time, Flextronics' revenues from Nortel will increase each quarter and should reach an annual revenue rate of approximately $2.5 billion.
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Title Annotation:Industry News
Publication:Circuits Assembly
Date:Aug 1, 2004
Words:204
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