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SOLECTRON SIGNS MEMORANDUM OF UNDERSTANDING TO ACQUIRE HP'S LAKE STEVENS PRINTED CIRCUIT ASSEMBLY ACTIVITY

 MILPITAS, Calif., June 22 /PRNewswire/ -- Solectron Corporation (NYSE: SLR) and Hewlett-Packard Company (NYSE: HWP) today announced that they have signed a memorandum of understanding for Solectron to buy the assets and process technology associated with the printed circuit assembly activity at HP's Lake Stevens Instrument Division (LSID) located near Lake Stevens, Washington. Under the memorandum of understanding, Solectron will establish a contract manufacturing operation at the LSID site and supply printed circuit board assemblies to HP and other leading electronic OEMs.
 The proposed acquisition supports LSID's manufacturing strategies and continues Solectron's strategy of offering sophisticated cost- effective manufacturing services globally to major electronic OEMs.
 The completion of this transaction is contingent on the execution of definitive contracts and appropriate governmental approvals. The companies intend to complete contracts later this year and will announce further details at that time. This transaction does not involve marketing, research and development, administrative or other manufacturing operations located on the LSID site.
 Other terms of the proposed transaction were not disclosed.
 Established in 1981, LSID designs, manufactures, and markets electronic test and measurement equipment, including dynamic signal analyzers and low-frequency signal analyzers. The printed circuit assembly activity encompasses 42,000 square feet and employs 85 people. The assets and processes to be acquired in this transaction are specifically targeted at very high mix, low volume production environments.
 Dr. Ko Nishimura, president and CEO of Solectron, said, "The acquisition of Hewlett-Packard's LSID printed circuit assembly activity would complement our ongoing process and manufacturing engineering programs, and technology investments in the area of complex printed circuit board assembly."
 "With facilities in Milpitas, Calif. and Lake Stevens, Washington, Solectron will be better able to provide services to electronic OEMs on the West Coast," Nishimura continued. "In addition, our presence in the Pacific Northwest will continue the company's global expansion, which is driven by the growing need to meet customer manufacturing and delivery requirements."
 "LSID's manufacturing strategy is both to consolidate manufacturing processes internally and to use high-quality manufacturing vendors like Solectron where it makes sense," said Jim Martin, LSID manufacturing manager. "The agreement would allow us to pursue this strategy. At the same time it would allow Solectron to grow the competitive high-mix, low-volume operation by supplying critical manufacturing processes for HP and other companies."
 Hewlett-Packard Company is an international manufacturer of measurement and computation products and systems recognized for excellence in quality and support. The company's products and services are used in industry, business, engineering, science, medicine and education in approximately 110 countries. HP has 93,800 employees and had revenue of $16.4 billion in its 1992 fiscal year.
 Solectron Corporation, founded in 1977, provides customized, integrated manufacturing services to original equipments manufacturers. The company recently obtained ISO 9002 certification for its Milpitas, Calif. and Penang, Malaysia operations and plans to obtain certification for its Charlotte, N.C. and Bordeaux, France operations by the end of 1993. The company received the coveted Malcolm Baldrige National Quality Award in 1991 and has accumulated over 50 other quality and service awards from customers such as Apple Computer, Applied Materials, Conner Peripherals, Exabyte, Hewlett-Packard, IBM and SUN Microsystems. Solectron Corporation had revenue of $407 million in its 1992 fiscal year.
 -0- 6/22/93
 /CONTACT: Gary Weiner, 408-956-6695, or Jeff Cox, 408-956-6688, both of Solectron Corporation, or Laurie Nichol, corporate office, 415-857-5771, or Tom Johnson, Lake Stevens Instrument Division, 206-335-2215, both of Hewlett-Packard Company/
 (SLR HWP)


CO: Solectron Corporation, Hewlett-Packard Company ST: California IN: CPR SU:

LD -- NY006 -- 4409 06/22/93 09:04 EDT
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Date:Jun 22, 1993
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