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Flextronics Follows the Vertical Leader

By Katie Dean Staff Reporter
9/1/2006 10:43 AM EDT

Electronics manufacturing services firm Flextronics (FLEX) is following the lead of a Taiwanese powerhouse by offering customers a one-stop outsourcing shop to attract customers and fuel growth.

And so far, the strategy, called vertical integration, seems to be helping Singapore-based Flextronics at a time when many of its EMS peers are struggling. Bit by bit, Flextronics shares have added about 12% this year, after a precipitous 24% drop last October on disastrous quarterly results. Its shares closed Thursday at $11.79.

Vertical integration offers a range of services beyond typical EMS, such as assembling printed circuit boards. For instance, a cell-phone handset maker will outsource the entire integration of components such as plastic casing, printed circuit boards, lens and camera modules, antennae, power adapters and chargers to Flextronics, says Citigroup analyst Jim Suva...

This article gives a nice overview of FLEX's strategy and how it is trying to keep up with industry leader Hon-Hai.

JT :-)
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