Nortel sells certain manufacturing operations and related activities to Flextronics

June 30, 2004

2 Min Read

SINGAPORE -- Flextronics (NASDAQ:FLEX) today announced the signing of an agreement with Nortel Networks (NYSE: NT; TSX) whereby Nortel Networks will divest certain optical, wireless, and enterprise manufacturing operations and optical design operations to Flextronics.

Subject to closing the four-year manufacturing agreement, Flextronics will assume most of Nortel Networks' systems integration activities, final assembly, testing and repair operations, along with the management of the related supply chain and suppliers. Over time, Flextronics expects to consolidate and internally source its vertically integrated supply chain solutions, which include the fabrication and assembly of printed circuit boards and enclosures, as well as logistics and repair services.

Through an optical design services agreement, Flextronics will acquire a world-class group of engineers with expertise in end-to-end, carrier grade optical network products that include Edge, Core Switching, and Transport Line products. The design and engineering skills to be transferred to Flextronics include hardware development, software development and project management.

"Flextronics will be acquiring a design group with broad experience in telecommunications and optical networks, with extensive knowledge of optical products and processes. There are no independent design companies in the world that have this degree of design expertise, so we are thrilled to have expanded the scope of our engagement with Nortel Networks to include these services," said Michael Marks, Chief Executive Officer of Flextronics. "Coupled with our recently announced acquisition of a majority share of Hughes Software Systems in India, Flextronics will now have the most robust hardware and software telecom and datacom design capabilities of any EMS company in the world. We believe hardware design, software design, and manufacturing are converging, which makes the addition of the Nortel Networks design group an excellent fit with our long-term strategy of providing the lowest total cost solutions to customers in each of the market segments that we serve."

Nortel Networks Ltd.

Flextronics Corp.

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