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BEAVERTON, OR -- Laser drill maker ESI's chief executive yesterday warned that market capacity for drilling flexible circuits may be reaching a tipping point.

On a conference call with analysts, Ed Grady said the company may have missed sales from a key customer due in part to "some overcapacity in the flex via drilling market." The customer chose to upgrade its existing systems, rather than buy new, he added.

ESI's fiscal fourth quarter revenues were down 6% despite the period typically being a seasonally strong one for the flex business. "Weakness in the market this year was the primary factor in the year-over-year decline," said CFO Paul Oldham, citing softness in flex via drilling. 

Oldham said the company expects "modest improvement" as OEMs begin to ramp orders. 

Apple is ESI's largest customer, at 15% of annual sales.

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