UTStarcom, Inc. (Nasdaq: UTSI) today announced that it has selected San Jose-based Sanmina-SCI Corporation (Nasdaq: SANM) as its new outsourced electronics manufacturing service provider (EMS), a move that aligns with UTStarcom’s announced restructuring initiatives and expands the company’s cost savings efforts.
Under the terms of the agreement, Sanmina-SCI will provide full electronics manufacturing services for UTStarcom’s system products currently being built in UTStarcom’s Hangzhou facility. These services include new product introduction (NPI) support, material sourcing and procurement, printed circuit board assembly, system integration and testing, final pack-out and delivery. Increasing UTStarcom’s ability to manage demand swings, the flexible cost structure of this outsourcing agreement matches UTStarcom’s volume of orders and allows for a faster cash flow cycle and lower working capital usage.
“As we referenced in our June and November 2009 public conference calls, UTStarcom is taking steps to change its operational approach,” said Zheng Min, UTStarcom’s vice president of global supply chain. “This new relationship with Sanmina-SCI will allow UTStarcom to continue delivering quality products while taking advantage of improved manufacturing efficiencies.”
Outsourcing UTStarcom’s manufacturing capabilities not only improves the company’s asset utilization, but it broadens the supply chain for increased velocity and coverage.
“We are very pleased that UTStarcom has selected Sanmina-SCI as their electronics manufacturing services provider. We look forward to utilizing our vertically integrated suite of services including NPI, material procurement, manufacturing, system integration, and direct order fulfillment to bring value to our relationship. This strategic relationship allows us to grow in the networking market in the East China region,” said PK Chan, executive vice president of Sanmina-SCI Greater China Operations.
Source:http://www.prnewswire.com/news-releases/utstarcom-announces-plan-to-outsource-manufacturing-operations-82779802.html
