SAN JOSE -- Flextronics' Components business unit, which includes Multek, grew in the low-double digits sequentially and is expected to be breakeven by the end of the March quarter, the company said Thursday.

"Revenue expansion will lead to margin expansion," said CEO Mike McNamara. "The business has the potential to constantly operating the high-single digit operating margin range."

For its fiscal third quarter, Multek’s flexible printed circuit business (the former Sheldahl) saw strong growth in both North America and Asia, aided by multiple program wins in many market segments, he said.

McNamara said the relocation of certain manufacturing processes to inland China, where costs are lower, and an improved outlook for commodity prices would also help margins going forward. However, the unit is not expected to reach double-digit growth in 2011, McNamara said. The company added that the unit is expected to "cross over" into profitability during the current quarter, and then reach profitability for the June quarter.

Company CFO Paul Read said the firm wants the Components unit to reach a 4% operating margin by the end of the next fiscal year. "We do expect incremental margin increases throughout next year. A lot of it is mix-dependent and how fast our components business can get to that level as well next year."

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