SAN JOSE -- Sanmina believes profitability at its printed circuit board fabrication segment can significantly improve, the company's CEO said last night. Of the EMS company's five factories, four are currently in the black and the division is turning an operating profit, noted chief executive Jure Sola on a conference call with analysts.
"We believe the business can make a lot better margins," Sola said. "We have basically 5 factories today around the world. Four out of five are profitable. And as a division, it's making money. ... Our strategy for circuit boards is really to focus on high-end technology. We are -- we believe we are leader in the high-end, what we call, large boards."
Sola added that the unprofitable site -- which he did not disclose -- has been undergone significant technology upgrades and the costs of the capital investment have lowered profits.
"We [have] really been investing in about four, five key customers here to get this new technology to the market. I believe that this factory is going to be profitable.
"We build a product that is over 60 layers. We're building some products that's maybe only one or two companies in the whole can build."
Sola's comments came on the heels of Sanmina fiscal fourth-quarter revenue announcement. The company reported sales of $1.51 billion, down 4.4% year-over-year, and up 1.3% sequentially. The Components, Products & Services segment revenue, which includes printed circuit board fabrication, backplane assemblies, cable assemblies, enclosures, precision machining and plastic injection molding, plus various products and services include design, engineering, and repair, was up $12 million, or 3.6%, with gross margin down 90 basis points to 10.9%.
CFO Bob Eulau said the company thinks it can improve operating margins at its Integrated Manufacturing Solutions segment to 4% to 5%, and to 8% to 10% in the Components, Products and Services segment.