An analysis of the new york stock exchange established of the composite index to provide a comprehen

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An analysis of the new york stock exchange established of the composite index to provide a comprehen

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Unlike most EMS companies, our design and manufacturing services include a distinctive competence in display modules and systems and the integration of display modules and systems into other products. These display modules and systems include monochrome and color liquid crystal display, or LCD, components, organic light emitting diodes, or OLEDs, and flat panel monitors.

Our website is located at www.

Through our website, we make available free of charge our annual report on Form K, our proxy statement, our quarterly reports on Form Q, our current reports on Form 8-K, any amendments to those reports filed or furnished under the Securities Exchange Act, and our earnings press releases.

These reports and press releases are available as soon as reasonably practical after we electronically file them with the Securities and Exchange Commission.

An analysis of the new york stock exchange established of the composite index to provide a comprehen

These documents are also available in print to any stockholder requesting a copy from our corporate secretary at our principal executive offices. Industry Overview Historically, original equipment manufacturers, or OEMs, have been fully integrated, performing the engineering and design, new product introduction, assembly and manufacturing, testing, procurement, distribution and logistics, and aftermarket support functions for their products.

In recent years, however, OEMs have been under intense pressure to reduce costs, focus on core competencies, and reduce supply chain investment. By focusing on these functions, we believe that EMS companies provide OEMs with cost savings, superior technological know-how, and access to more advanced manufacturing processes.

These services enable OEMs to concentrate on their core competencies, such as product development, marketing, and sales. As a result of this outsourcing strategy, many OEMs are divesting a significant portion of their manufacturing facilities, and many newer OEMs are choosing to outsource rather than add additional capital equipment and build internal manufacturing infrastructures.

Today, the EMS industry consists of companies that provide a broad range of services, including engineering and design, new product introduction, printed circuit board assembly, or PCBA, box build, testing, distribution and logistics, and aftermarket support services for OEMs in the electronics industry.

The trend toward outsourcing by OEMs has continued in the recent economic downturn, as OEMs have been under increased pressure to pursue aggressive cost savings. In addition, OEMs have continued to move manufacturing programs to lower cost regions and sought EMS providers with global footprints.

Although EMS industry revenue declined in recent years as a result of significant cut backs in customer production requirements, industry revenue have slowly begun to increase again over the last year as inventories have declined and customer production requirements generally have begun to stabilize.

We believe further growth opportunities exist for EMS providers to penetrate the worldwide electronics markets. We also believe that an EMS provider with a global presence will grow faster than the industry average because of the ability to offer multinational OEMs a comprehensive set of outsourced services through a single global manufacturing platform.

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The factors driving OEMs to favor an outsourcing strategy include the following: In the current economic environment, OEMs are under significant pressure to reduce manufacturing costs and capital expenditures.

In addition, as OEM products have become more technologically advanced, the manufacturing and system test processes have become increasingly automated and complex, requiring significant capital investments.

EMS companies enable OEMs to access technologically advanced manufacturing and test equipment and facilities without additional capital expenditures. OEMs seek to reduce their manufacturing costs by having EMS companies manufacture their products in the lowest cost locations that are appropriate for their products and end customers.

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OEMs also are increasingly requiring particular products to be manufactured simultaneously in multiple locations, often near end users, to bring products to market more quickly, reduce shipping and logistics costs, and meet local product content requirements.

Global EMS companies are able to satisfy these requirements by capitalizing on their geographically dispersed manufacturing facilities, including those in lower cost regions. OEMs face increasingly short product life cycles resulting from increased competition and rapid technological changes.

As a result, OEMs must reduce the time required to bring their products to market. By shifting design, manufacturing, testing, logistics and distribution, and aftermarket support functions to EMS companies, OEMs can focus their resources on their core competencies, including product development, marketing, and sales.

OEMs continually seek access to engineering expertise and manufacturing technologies necessary to build their increasingly complex products, such as displays, as described below.

OEMs are motivated to work with EMS companies to gain access to their expertise in product design, assembly, manufacturing, and testing technologies. Outsourcing to EMS companies allows OEMs to enter into short-term manufacturing contracts and lower their investment in inventory and long-term manufacturing assetsenabling them to increase their return on assets.

As a result, OEMs can react more quickly to changing market conditions and allocate capital to other core activities. As part of our suite of electronics manufacturing services, our expertise in display systems differentiates us from competitors. Displays are a prevalent feature in most OEM products.

An analysis of the new york stock exchange established of the composite index to provide a comprehen

OEMs increasingly believe that a display interface is important because it makes products more useful and easier to operate. Custom liquid crystal displays, or LCDs, including both monochrome and color displays, address requirements for high performance, increased information content, low power, and low cost.

In addition, organic light emitting displays, or OLEDs, which are a relatively new technology, are making advances in technology development, cost reduction, and power consumption and are beginning to be used in mobile and other applications.

Custom-designed display modules provide OEMs a cost-effective means to differentiate their products from the products of their competitors.SMBC will continue to provide SMBC has been enhancing its initiatives in the Asian region for support for clients for increasing new business opportunities realizing the Asia-Centric operations.

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