Nortel, Flextronics Update Plan

SINGAPORE -- Following the successful transfer of Nortel's manufacturing operations and related activities in Chateaudun, France on August 22, 2005, Flextronics (Nasdaq:FLEX - News) and Nortel (NYSE:NT - News; TSX:NT - News) today announced that both companies continue to expect to transfer Nortel's similar operations in Calgary, Alberta and Campinas, Brazil to Flextronics by the end of the first quarter of 2006.

Nortel also announced that it will establish a Regional Supply Chain Center in Monkstown, Northern Ireland to lead its supply chain operations in the EMEA (Europe, Middle East, Africa) region. Nortel and Flextronics also agreed that Nortel will retain its Monkstown manufacturing operations. Nortel and Flextronics anticipate that the decision for Nortel to retain Monkstown manufacturing will result in a reduction of cash proceeds to Nortel from assets divested of approximately US$100 million to a total range of proceeds of US$575 to $625 million of which US$200 to US$250 million is expected to be received in 2006.

Flextronics also announced that this change will not have a material impact on its revenues and still expects to generate more than US$2 billion of annual revenue from the aggregate Nortel program once transfer of the remaining manufacturing operations and vertical integration transfers are completed.

Flextronics Corp.