Conference Call Highlights: Flextronics Expands Presence in China (FLEX)

From Flextronics' (NASDAQ:FLEX) fiscal Q4 2006 earnings conference call:

Mike McNamara, Chief Executive Officer

Our printer circuit operation continues to form very well. We are expanding our rigid circuit capacity in China with a new factory that we expect to come online in December 2006 quarter. The new flexible circuit factory in China should also begin volume productions in the September 2006 quarter. We are also expanding our existing HDI factory in China. Obviously, we are making significant investments in our future. We think these investments will not only help us meet our revenue growth rate expectations while yielding better profits and return for our shareholders, but will also improve our competitiveness and enhance our capabilities.

We continue making significant investments in our design and vertical integration capability. For example: as previously disclosed last quarter, we opened a engineering design center and have now increased our cell phone design engineering by over 300 engineers at this location. We have also acquired the WWL, a small but talent-rich Hong Kong and China based company engaged in the design, development, and manufacturer of a variety of digital products. We are also making organic investments in various technologies in our ODM and component businesses including camera modules to power supply and other technologies such as TV tuners.

We took a lot of our operations in Europe where there was a tremendous amount of design being done and we moved a lot of that competence into China so we probably ramped down Europe last year by probably 150-200 people, and we ramped up leaving China with about 300 people and so we really operationally we went into a real transition year.