2014 IPC APEX EXPO EMC Management Council

THE EMS SOLUTION 2.0:
HOW & WHY THE BUSINESS MODEL IS
CHANGING
Eric Miscoll
(817) 251-4929
Eric@CharlieBarnhart.com
IPC EMS MANAGEMENT
COUNCIL MEETING 2014

© 2013 Charlie Barnhart & Associates LLC
Insights into the world of global electronics manufacturing
“It is not the strongest of the
species that survives, nor the most
intelligent that survives.
It is the one that is the most
adaptable to change.”
- Charles Darwin
2

TRENDS IMPACTING INDUSTRY
3

TRENDS IMPACTING EMS INDUSTRY
1. Demand Cycle has Shortened
2. Risk in the Supply-Chain at Unprecedented Levels
3. EMS/ODM Prices Are Converging
4. Costs in China Are Rising Far Faster Than Predicted
5. Regionalization Is Gaining Momentum
6. Global Capacity Utilization Is Increasing
7. Margin deterioration across sectors
8. Slower Rate of Growth of Electronics Outsourcing
9. Insourcing by OEMs
10. OEMs are reclaiming the supply chain
11. EMS Are Trying to Diversify Their Revenue Stream
4

ODM SHIFT
• Acer & ASUSTeK:
– Computer OEM
• HTC:
– Smartphone OEM
• Inventec & Quanta:
– Servers
• Pegatron:
– Consumer electronics (e.g., tablets)
• Wistron:
– Cloud computing, after-sales service, medical equipment, and
recycling
“For the sake of increasing
margins, people are eyeing
diversification and vertical
integration and looking for new
cornerstones in this competitive
landscape.”
- Elton Yang, CFO, Quanta
5

Manufacturing costs in China continue to rise
with the potential for much larger increases
should labor pressures continue to escalate or
should the Yuan be allowed to float against
global currencies.
ESCALATING COSTS IN CHINA
6

HISTORICAL LABOR RATES
PCBA CY2009 CY2010 CY2011 CY2012 CY2013
Australia $46.50 $42.70 $42.40 $43.20 $43.32
Brazil $26.45 $30.23 $31.00 $31.45 $32.32
Canada $49.12 $41.78 $42.15 $44.17 $43.67
China $10.15 $11.31 $12.45 $13.38 $17.26
E. Europe € $47.30 $50.10 $51.00 $53.76 $55.57
E. Europe non € $26.13 $30.02 $30.40 $32.23 $33.75
India $9.21 $9.91 $9.95 $10.37 $10.79
Israel $35.97 $34.81 $34.89 $34.83 $37.43
Malaysia * * $16.29 $16.88 $17.26
Mexico - Border * * $16.80 $17.51 $18.28
Mexico - Central * * $11.32 $11.99 $12.50
Philippines * * * * $8.98
Singapore $25.15 $26.10 $28.15 $29.20 $29.96
Thailand * * * $19.39 $20.08
Turkey * * * * $16.13
United Kingdom $93.63 $93.11 $92.75 $95.49 $95.49
USA $37.96 $39.30 $39.40 $39.61 $39.78
Vietnam $8.75 $8.80 $8.95 $9.36 $10.11
W. Europe $89.37 $92.16 $90.10 $92.99 $95.81
Historical Cost of Labor/PCBA (EMS only)
7

With the exception of large low-mix/high
volume projects it is now cheaper, on a landed-
cost basis, to utilize low-cost regional versus
cross-hemispheric solutions.
RETURN TO REGIONALIZATION
(Build in the region for the region)
8

EXAMPLES OF REGIONALIZATION
9

MARGIN DETERIORATION
Sector <1$ $1 $5 $10 $25 $50 $100 $250 $500 $750 $1K
Mil/Aero -7.0% -5.0% -3.0% -3.0% -2.0% -1.0% -1.5% -1.5% -1.0% -1.0% -1.0%
Ind/Med/Auto -4.0% -3.0% -2.0% -2.0% -1.0% -1.0% -0.5% -0.5% 0.0% 0.0% 0.0%
Com/Comp/Cons -5.0% -3.0% -1.0% -1.0% -0.5% -0.5% -0.5% 0.0% 0.0% 0.0% -0.2%
10

INSOURCING BY OEMS
11

BEYOND OUTSOURCING ROADMAP
12

IMPACT OF TRENDS
13

WHAT DOES THIS MEAN FOR EMS?
• Change is already happening
• Margins will not return to what they were
• If you are not already seeing this or
planning for the future, then you better
GET BUSY!
• Innovative thinking is required
14

QUESTION FOR EMS
• What percentage of your revenue stream
have you converted from commodity
services?
– E.g., PCBA & Box Build
15

EMS THAT ARE CHANGING
• Lightspeed MFG: Repair services
• CTS Corporation: Components & Sensors
• Tepcomp: LED modules
• Stadium Group: Displays OEM
• Circuitronics Inc.: Prototyping
• Foxconn: Components, retail outlets, etc.
• Celestica: Supply Chain as a Service
• Nam Tai: Property development and mgmt
16

OEM-EMS RELATIONSHIP
• Change by one party in a relationship
impacts the other party, whether desired
or not. (e.g., child, partner, supplier)
• So as EMS diversify their revenue stream,
OEMs will be impacted.
– Fewer external options
– Higher prices
– Lower leverage
17

CBA’S ADVICE
18

WHAT TO DO?
1. Improve your bottom line
2. Fire or renegotiate unprofitable
customers
3. Make “lean” part of your fabric
4. If small (<$100M) stay small
5. Innovate
6. Diversify revenue stream
19

MANAGEMENT METRICS
• Revenue per Employee
– $300K-$350K
• Customer Base
– Top 5 more than 50%of Revenue
– Bottom 5 not less than 5% of Revenue
– No customer over 25% of Revenue (>2 years)
– No customer under .25% of Revenue
20

CLOSING THOUGHT
“It is not necessary to change. Survival is
not mandatory.”
- W. Edwards Deming
21

Thank You.
Questions?
22

Achieving Operational
Excellence for Electronics
Manufacturers
Speaker:
Matthew Littlefield
President and Principal Analyst,
LNS Research

Agenda
• About LNS Research
• Industry Drivers and Challenges
• Operational Excellence Journeys
• Operational Excellence Goals & Metrics
• Accelerating Success – People
• Accelerating Success – Process
• Accelerating Success – Technology
• Summary / Recommendations
• Q&A
©LNS Research 2014

©LNS Research 2014
Manufacturing industry research firm that helps clients
innovate and achieve Operational Excellence…
People, Processes & Technology
Research & Consulting Areas:
 Enterprise Quality
 Sustainability / Energy Management
 Manufacturing Operations Management
Differentiators:
 Experienced analysts
 Primary research – large data sets
 Interactive analysis & data visualizations
 Deep industry executive contacts
 Social media activity
About LNS Research - www.lnsresearch.com

Global Executive Council
 Starbucks – VP of Global Quality and Regulatory Affairs
 Onyx Pharmaceutical – VP of Global Quality
 Whirlpool – Director of Quality
 Lindt Chocolate – VP R&D and Quality
 Oriflame – Corporate Quality Lead
 Champion Technology – VP Quality and EH&S
 Gurwitch Products – VP Research and Quality
 Newell Rubbermaid – Director of Quality
 Hygia Health Service – VP of Operations
 Discount Tire – VP of Quality
 Daikin McQuay – Director, Corporate Quality
 Bio-Rad Laboratories – Director of Quality Assurance
 Owens-Illinois – VP of Global Quality
 Harley-Davidson – Director Corporate Quality
 Alcoa – Director Corporate Quality
 Bridgelux – VP Corporate Quality
 Plexus – VP Corporate Quality
 Fresenius – VP Corporate Quality
 Alent – VP Corporate Quality
 Corbian – VP Quality
 Kellogs – VP Quality

Research Model
©LNS Research 2014

Industry Drivers and Challenges
©LNS Research 2013

Electronics Industry Overview
•Area of Focus
•Component Manufacturing, Printed Circuit Boards, and Final
Assembly
•Competitive Landscape
•Global
•All sizes: multi-billion dollar companies to small job shops
•Market leaders include: Flextronics, Celestica, Sanmina-SCL,
Jabil, and Plexus
•Customers
•Generally large, powerful, and demanding
•Regulated and unregulated industries
•Medical Device, Aerospace and Defense, Industrial
Equipment, etc.
©LNS Research 2012

Major Industry Challenges
•Shrinking Operating Margins
•High competition/market concentration
•Pressures for large and small players in U.S., Europe,
Mexico, and Asia
•Balancing Cost and quality
•Complex Supply Chains
•Keeping operating margins low
•Issues with traceability and quality
•Disparate compliance standards
•Service and Warranty Management
•Quality and traceability issues surface as higher warranty
reserves and increased use of service
©LNS Research 2012

Major Industry Challenges
•Short Product Lifecycles
•Rapidly changing consumer demands
•Collaboration and integration across the value chain: MOM,
CRM, SCM, PLM, and EH&S
•Uncertain Demand
•Cyclical and economic volatility
•Changing consumer tastes/preferences
•Sustainability/Regulatory Requirements
•Tightening laws/regulations in electronics
• Companies are beginning to consider the product lifecycle
beyond disposal
• Example: EU passed REACH and RoHS to protect
environment
©LNS Research 2012

Research Demographics
300+ Respondents to LNS Research Manufacturing Survey,
500+ Respondents to Quality Survey
©LNS Research 2014

Top Objectives & Challenges
©LNS Research 2014
• The top objectives are customer focused
• The top challenges are people & systems related

Operational Excellence Journeys
©LNS Research 2014

Operational Excellence Journeys

Operational Excellence Goals & Metrics
©LNS Research 2013

Goals & Metrics - Alignment & Deployment

Goals & Metrics - Alignment & Deployment Process
1.) Understand and Articulate Strategy: have a clear and universally
understood manufacturing strategy that is in support of the corporate
business strategy
2.) Translate Strategy into Specific Goals: turn that strategy into
specific goals for business groups and associated supply chains, as
well as plants, units, and production lines
3.) Map Goals and Specific Measures for Success: use a cross-
functional team to map each detailed translation across the
enterprise
4.) Determine Key Performance Indicators: develop a set of
manufacturing KPIs to measure progress toward your goals
5.) Establish Communication Procedures for KPIs: make sure the
right information is getting to the right people in a timely manner
6.) Set Processes for How to Act on KPI Information: determine best
practices for individuals from the shop to top floor to interact with
KPIs
7.) Match Performance Incentives to Aligned Goals: reinforce the
effectiveness of measuring KPIs by incentivizing progress

Categories/Sets of Operational Excellence Metrics

Top 28 Manufacturing KPIs within Categories/Sets
Improving Customer Experience & Responsiveness:
1. On-Time Delivery to Commit
2. Manufacturing Cycle Time
3. Time to Make Changeovers
Improving Quality:
4. Yield
5. Customer Rejects/Return Material
Authorizations/Returns
6. Supplier’s Quality Incoming
Improving Efficiency:
7. Throughput
8. Capacity Utilization
9. Overall Equipment Effectiveness (OEE)
10. Schedule or Production Attainment
Reducing Inventory:
11. WIP Inventory/Turns
Ensuring Compliance:
12. Reportable Health and Safety Incidents
13. Reportable Environmental Incidents
14. Number of Non-Compliance Events / Year
Reducing Maintenance:
15. Percentage Planned vs. Emergency Maintenance
Work Orders
16. Downtime in Proportion to Operating Time
Increasing Flexibility & Innovation:
17. Rate of New Product Introduction
18. Engineering Change Order Cycle Time
Improve Financial Performance:
19. Total Manufacturing Cost per Unit Excluding
Materials
20. Manufacturing Cost as a Percentage of Revenue
21. Net Operating Profit
22. Productivity in Revenue per Employee
23. Average Unit Contribution Margin
24. Return on Assets/Return on Net Assets
25. Energy Cost per Unit
26. Cash-to-Cash Cycle Time
27. EBITDA
28. Customer Fill Rate/On-Time delivery/Perfect
Order Percentage

Selecting and Implementing the Right
Operational Excellence Metrics
• Benchmark
• Decide / Commit
• Choose metrics that directly
relate to SMART goals
• Ensure that the metrics can
be reliably and efficiently
produced
• Create team-based and role-
based metrics
• Most people can only
optimize their own
time/activities around 5-6
metrics
• Plan, Do, Check, Act
• Reward

Accelerating Success - People
©LNS Research 2014

Accelerating Success – People:
Building Organizational Capabilities

Knowledge Management Issues & Opportunities:
People, Process & Technology
People:
• Aging Workforce (10,000 retiring per
day in US – Pew Research Center)
• Knowledge Capture
• Knowledge Transfer
• Training & Certification
• JIT Information Access
• Leveraging SMEs
• Team, Partner and Customer
Collaboration
Process & Technology:

Accelerating Success - Process
©LNS Research 2013

Accelerating Success - Process

Building Manufacturing Process Capabilities
• Most companies are using combinations of 2 to 4 programs
• Choose the most important programs by industry and issues
• Training, certification, widespread engagement, collaboration

Accelerating Success - Technology

Architectural Approach to Quality Software
©LNS Research 2013

Accelerating Success – Technology

Accelerating Success – MOM Software

Accelerating Success – Real-Time Performance

Role-Based OI / EMI Capabilities

OI / EMI – Dashboards & Analytics
• Functional expectations & opportunities are growing

Big Data Analytics
• Big Data Analytics is about harnessing a collection of
massive amounts of structured and unstructured data from
across the enterprise
• Exponential explosion of manufacturing data coming from
connected devices / IoT – estimated 13.5 Billion
manufacturing devices connected by 2022 (Cisco)
• Previously unknown interrelationships between data will
come to light with new analytics technologies like Hadoop

Big Data – Manufacturing Application Examples
• Enabling better product/production forecasts that tie to
consumer trends
• Improving interactions with suppliers based on dynamic
sourcing needs
• Providing faster customer service and support - harnessing
knowledge
• Better understanding customer requirements for new products
• Better correlations of performance across multiple plants
• Better understanding plant performance across multiple metrics
• Performing predictive modeling of manufacturing data
• Enabling real-time alerts based on analyzing manufacturing data
• Correlating manufacturing and business performance
information together
• Mining combinations of manufacturing and other enterprise data
to uncover new improvement and business opportunities

Mobile Technologies
• Mobile devices and applications have removed the restrictions
of required on-site access, enabling workers to access the
performance and decision support information applicable to their
respective role, including:
• Executives
• Plant Managers/Supervisors
• Plant Operators
• Technical/Quality Personnel
• Can create an entirely paperless manufacturing environment
• Allows information to be shared between suppliers and
customers via similar mobile capabilities
• 18% currently have Mobile Operations Visualization &
Management capabilities
• 14% have Mobile Operations Visualization & Management
capabilities planned within 1 Year

Cloud Adoption for MOM Applications
• Cloud / SAAS Adoption Rates More Than Doubling in
Manufacturer’s Future Plans
• 90% of MOM Vendors Either Have or Are Developing
Cloud-based Solutions

Cloud Benefits for Manufacturers
• Benefits of Cloud versus On-Premise Solutions
• Proven in IT applications
• Requires less internal IT resources
• Automatic software updates
• Unlimited capacity upgrades
• Built-in disaster recovery
• Universal remote access
• Easier to aggregate information across plants
• Little to no capital expenditures
• Lower lifecycle / maintenance costs

Top Selection Criteria for MOM Software
• Having Sufficient Functionality is Paramount
• Cost & Ease of Integration with Existing Applications Come Next

Case Studies
©LNS Research 2013

• Before Software Supporting Operational Excellence
• Heavy documentation requirements = management of
(literally) tons of data and paper.
• Cumbersome and time-consuming work flows to
ensure tracking
• Reactionary approach to quality issues, struggles to
meet ISO-9001 and AS-9100 requirements
• Reliance on nearly 40 stand-along spreadsheets to
track all company data but each was a silo of
information, lots of redundancies
Real-Life Example

• After Software Supporting Operational Excellence
• Automated electronic workflows and electronic data
management.
• Efficient, non-redundant process flows
• Improved productivity
• Exceeding standards for traceability, document
management and process controls
• 25% cycle time reduction for audits
• Eliminated manual processes and duplication of effort
• Leaner operations
• 32.5% reduction in scrap/waste
Case Study: Real-Life Example

Market Leaders Create a Holistic SQM Strategy
©LNS Research 2013

Summary / Recommendations
©LNS Research 2013

Summary / Recommendations
• Start or refine your Operational Excellence journey
• Ensure alignment with strategy, goals, actions and metrics
• Empower people with both team-based and role-based, real-time
performance information
• Build organizational capabilities for sustainable success
• Implement the most important process / programs to accelerate
progress
• Over time, build a continuous improvement culture
• Support process improvements and knowledge management with
technology – in particular, MOM software integrated with
information in Enterprise and Automation Systems
• Investigate and experiment with new technologies – Cloud,
Mobile, Big Data Analytics
• The appropriate scope of your journey may be at the plant, line of
business or enterprise level

Thank You!!
For More Information -
Contact:
Matthew Littlefield
Principal Analyst – LNS Research
matthew.littlefield@lnsresearch.com

• Leading OEMs, Distributors, Suppliers &
EMSs use SiliconExpert Daily
• Our Electronic Component Database of
over 250 million components powers our:
o Comprehensive software tools
o Integrated solutions
o Professional services
About Us

Reactive vs. Proactive Approaches to
Obsolescence Management
250 Million+ Orderable Part Numbers
Up to 42 Parametric values/product line
Risk Analysis & Obsolescence
Forecasting Algorithms developed
with CALCE
Environmental Data tracked: EU &
China RoHS, REACH, WEEE
compliance & Material Declarations
Parametrically-derived cross-references
for millions of parts
Our Database

Identifying the Impacts of SEC
Regulations in the Electronics
Industry
Conflict Minerals

• Defined by Dodd-Frank Act Section 1502(e)(4)
• Tantalum, Tin, Tungsten, and Gold
• A mineral is conflict free if it did not originate in the DRC or
surrounding countries
Definition of Conflict Minerals
Environmental Team
Access to this information is quickly becoming
imperative as the first report is due on May 31, 2014
for the 2013 calendar year and then annually.

Conflict Minerals- Products
Top 10 Products with 3TG Parts

SiliconExpert Research and Analysis
Conflict Minerals Process
• Determine the requirements for each supplier within the regulations
• Determine due diligence responsibilities of each supplier/OEM
• Establish communication with supplier
• Determine documentation available and data
collection procedures

Reactive vs. Proactive Approaches to
Obsolescence ManagementSiliconExpert & Conflict Minerals
Data Collection
Most Up to Date Conflict Mineral Statuses
-Over 1,000 suppliers
All Documents & Templates
-EICC, COC, Conflict Minerals Policy,
Responsibility Report, History
Search by Supplier or Smelter
- Access to smelter & mining information
* EICC stands for: Electronic IndustryCitizenship Coalition
* COC stands for : certificate of compliance (company statement)
Conflict Mineral Module

Market Outlook
Small & Medium EMS Companies
Custer Consulting Group
www.custerconsulting.com
March 2014
20140303

Challenges
Financial data on individual, small EMS
companies typically not publicly available
Markets can be very localized

Topics
Global & U.S. Economy
Electronic Equipment
- World overview
- Target Domestic Markets
Active & Passive Components
EMS/ODM Markets
- Global
- N America
Summary & Forecasts

Business Conditions
After a weak 1H’13 global business conditions improved in the
second half of the year
2013 finished strong
U.S. economy is currently expanding but there are signs of slower
global growth
Weaker domestic military market offset by continued growth in
instrument & control sectors
Encouraging Signs:
- Electronic equipment shipments growing in all regions
- Leading indicators are generally positive except for China.
- Some re-shoring to N America
20140303

Industrial Production – World
% Change vs. One Year Earlier
Britain + 1.8 Dec
Czech Republic + 9.3 Dec
France + 0.5 Dec
Germany + 2.9 Dec
Italy - 0.7 Dec
Netherlands + 1.8 Dec
Russia - 0.2 Jan
Spain + 3.5 Dec
Euro Area + 0.5 Dec
Canada + 2.6 Nov
USA + 2.9 Jan
China + 9.7 Dec
India - 0.6 Dec
Malaysia + 4.8 Dec
Singapore + 3.9 Jan
S Korea + 2.6 Dec
Taiwan - 1.8 Jan
Thailand - 6.1 Dec
Japan + 7.1 Dec
www.economist.com + Eurostat
20140301

U.S. Industrial Production
Index (2007=100)
www.federalreserve.gov/releases/g17/table1_2.htm
60
65
70
75
80
85
90
95
100
105
110
1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20132014
IP
20140214

U.S. GDP Growth
% Change vs. Prior Quarter (2005 $)
-10
-8
-6
-4
-2
0
2
4
6
8
10
1/95
3/95
1/96
3/96
1/97
3/97
1/98
3/98
1/99
3/99
1/00
3/00
1/01
3/01
1/02
3/02
1/03
3/03
1/04
3/04
1/05
3/05
1/06
3/06
1/07
3/07
1/08
3/08
1/09
3/09
1/10
3/10
1/11
3/11
1/12
3/12
1/13
3/13
www.bea.gov/national/
20131221

Purchasing
Managers
Indices
(Leading Indicators)

Global "Purchasing Managers" Index
Diffusion Index, >50 = Growth
Markit Economics
30
35
40
45
50
55
60
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
PMI
20140303

China "Purchasing Managers" Index
Markit Economics
20140303
40
45
50
55
60
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
Jan
Apr
Jul
Oct
Jan
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
PMI

U.S "Purchasing Managers" Index
ISM
ISM
30
35
40
45
50
55
60
65
70
Jan
Jun
Nov
Apr
Sep
Feb
Jul
Dec
May
Oct
Mar
Aug
Jan
Jun
Nov
Apr
Sep
Feb
Jul
Dec
May
Oct
Mar
Aug
Jan
Jun
Nov
Apr
Sep
Feb
Jul
Dec
May
Oct
Mar
Aug
Jan
Jun
Nov
Apr
Sep
Feb
Jul
Dec
May
Oct
Mar
Aug
Jan
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20132014
PMI
ISM
Growth >50
20140303

PMI Leading Indicator
as
EMS Forecasting Tool

U.S PMI Leading Index vs
N American EMS Shipments
ISM & IPC
0.70
0.80
0.90
1.00
1.10
1.20
1.30
1.40
1.50
1.60
1.70
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
2007 2008 2009 2010 2011 2012 2013 2014
EMS Shipments
Zero Growth
20140303
3/12 Growth
1 year
Lead

BUSINESS CYCLE
Electronic Equipment, EMS/ODM Companies,
Components, Materials & Capital Equipment
-6
-4
-2
0
2
4
6
0 30 60 90 120 150 180 210 240 270 300 330 360
EMS/ODM
Components
Raw Materials
Capital Equip
Expansion ContractionTime ->
20130915
% Growth
+
-
0

U.S. Electronic Equipment, N. American PCBs,
Small/Med EMS & PCB Process Equipment
$ Shipment Growth20140222
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
PCB
Elec Equip
PCB Process Equipment
Zero Growth
Small/Med EMS
3/12 Rate of Change
IPC, U.S. Dept of Census & Process Equipment Financial Reports

World
Production

World Electronic Equipment Shipments
by Region 2013 @ 2012 Exchange Rates
Electronic Outlook 10/13
20%
15%
6%
52%
7%
N America
W Europe
Japan
Rest of Asia
ROW
Total Production: $2,002 Billion
Final
Assembly

World Electronic Equipment Production by Type
@2012 Exchange Rates
2012 TOTAL: $1,991 Billion
2.3%
22.0%
13.1%
7.5%26.4%
9.0%
10.1%
9.7%
Business
Communication
Consumer
Auto
Computer
Gov/Military
Industrial
Instrument
20130101

World Electronic Equipment Production
By Type20140221
0
100
200
300
400
500
600
Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Millions
industr+instru
gov/mil
Computer & Peripherals
automotive
consumer
Telecom/Datacom
Business
based upon some
historical estimates
+5.6%

Electronic Equipment Suppliers
Composite of 141 Public Companies
Revenue, Net Income & Inventory
Computer 13, Internet 9, Storage 10, Communication 20, SEMI 20, Medical 23, Instruments 11,
Military 6, Business & Office 3, Consumer 13, Automotive 11
20140221
-100
0
100
200
300
400
500
600
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
$ Billions
Revenue
Income
Inventory
+5.6%

Electronic Equipment Suppliers
Quarterly Revenue Growth
Computer 13, Internet 9, Storage 10, Communication 20, SEMI 20, Medical 23, Instruments 11, Military 6, Business & Office 3
+ Media tablets from all vendors, Consumer 13, Automotive 11
20140221
-20
-15
-10
-5
0
5
10
15
20
25
Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
%Growth

Global Electronic Equipment Shipment Growth
12/12 & 3/12 Rate of Change
141 OEM company sales composite
20140221
0.80
0.85
0.90
0.95
1.00
1.05
1.10
1.15
1.20
1.25
1.30
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
RateofChange
12/12 3/12 0 Growth

Inventory/Sales Ratios
Large Component Distributors, Semiconductor, EMS & OEM Companies
Custer Consulting Group based upon company financials
20140222
0.15
0.25
0.35
0.45
0.55
0.65
0.75
0.85
Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Semiconductor
EMS
OEM
Component Distrib
Ratio: Inventories/Sales

Regional
Production

European Computer, Electronic & Optical Products
Production
Eurostat, C26 category, EU 27 countries
20140212
80
85
90
95
100
105
110
115
120
1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Index (2010=100), Seasonally Adjusted

Japan Electronic Equipment Production
by Month 2000 to Present
0
200
400
600
800
1000
1200
1400
1600
1800
2000
1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Elec Application Equip
Electronic Measuring Instrumentation
Communications Equipment
Computers & Related Equipment
Electronic Business Machines
Consumer Electronic Equipment
JEITA www.jeita.or.jp/
20140221
Yen Billion

Taiwan/China Electronic Equipment Producers
Composite of 101 Manufacturers
Consolidated Revenue
Taiwan listed companies, often with significant manufacturing in China
20140212
0
100
200
300
400
500
600
700
800
900
1000
1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Dec 2013 up 10.3% compared to
Dec 2012 and up 1.1% compared to
Nov 2013
NT$ Billions

U.S. Electronic Equipment Orders & Shipments
Computer, Communications, Measurement & Control and Military
www.census.gov/indicator/www/m3/
20140301
14
16
18
20
22
24
26
28
30
32
34
Jan
Jun
Nov
Apr
Sep
Feb
Jul
Dec
May
Oct
Mar
Aug
Jan
Jun
Nov
Apr
Sep
Feb
Jul
Dec
May
Oct
Mar
Aug
Jan
Jun
Nov
Apr
Sep
Feb
Jul
Dec
May
Oct
Mar
Aug
Jan
Jun
Nov
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20132014
Thousands
Orders
Shipments
$ Billions (monthly, seasonally adjusted)

Regional Electronic Equipment
Shipment Growth
20140301
0.6
0.7
0.8
0.9
1.0
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
2.0
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Taiwan/China
Japan
USA
Europe (EU27)
Zero Growth
3/12 Rate of Growth (in local currency)
Sources: IPC, JPCA, Taiwan/China composite; Eurostat "wiring devices" for Europe
Calendar Year

World Electronic Equipment Monthly
Shipments
Converted @ Constant 2012 Exchange Rates
Source: Custer Consulting Group & Electronic Outlook Corp
20140221
0
10
20
30
40
50
60
70
80
90
100
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
USA
W Europe
Japan
Taiwan+China
ROA
ROW
US$ B

Shipments
Converted @ Constant 2012 Exchange Rates
20140221
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
ROW
ROA
Taiwan+China
Japan
W Europe
USA
% of US$ Total

Shipments
Converted @ Fluctuating Exchange Rates
20140301
80
100
120
140
160
180
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
January 2014 up 8.4% vs January 2013
US$ M

U.S. Electronic Equipment -
Orders, Shipments &
Inventories

U.S. Electronic Equipment Order & Shipment Growth
Computer, Communications, Measurement & Control and Military
20140301
0.70
0.80
0.90
1.00
1.10
1.20
1.30
Jan
Jun
Nov
Apr
Sep
Feb
Jul
Dec
May
Oct
Mar
Aug
Jan
Jun
Nov
Apr
Sep
Feb
Jul
Dec
May
Oct
Mar
Aug
Jan
Jun
Nov
Apr
Sep
Feb
Jul
Dec
May
Oct
Mar
Aug
Jan
Jun
Nov
Apr
Sep
Feb
Jul
Dec
May
Oct
Mar
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20132014
Shipments
Orders
Zero Growth
3/12 Rate of Change

U.S. Electronic Equipment Orders
Monthly Data
20140301
0
2
4
6
8
10
12
14
16
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20132014
Search & Navigation
Electromedical, Instr & Control
Communication
Computer
Defense

U.S. Electronic Equipment Orders
Monthly Data
20140204
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Jan
Jun
Nov
Apr
Sep
Feb
Jul
Dec
May
Oct
Mar
Aug
Jan
Jun
Nov
Apr
Sep
Feb
Jul
Dec
May
Oct
Mar
Aug
Jan
Jun
Nov
Apr
Sep
Feb
Jul
Dec
May
Oct
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Medical, Measuring & Control
Search & Navigation - non Military
Communication- non Military
Computer & Related
Military-Search & Navigation
Military-Communications

U.S. Electronic Equipment Inventories
Monthly Data
20140301
0
2
4
6
8
10
12
14
16
18
20
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20132014
Thousands
Search & Navigation
Electromedical, Instr & Control
Communication
Computer
Defense

U.S. Electronic Equipment Inventories vs. Orders
20140301
1.00
1.20
1.40
1.60
1.80
2.00
2.20
2.40
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20132014
Ratio Inventories/Orders

Market Segments
Volume (Shift to Low Cost Areas)
Personal Computers
Mobile Phones
Other Consumer Electronics
Datacom/Telecom
Automotive
"Protected"
Military
Medical
Instruments & Controls
High IP Content
Prototype, Quick Response, Short Run, Need for Local Support

Global Electronic Supply Chain Growth
4Q'13 vs. 4Q'12 (Preliminary)
6
-4
-8
3
0
17
-5
7
5
9
-4
32
5
3
6
12
8
8
13
6
4
-10 0 10 20 30 40
Military
Business & Office
Medical
Communication
Internet
Computer
Data Storage
Automotive
Consumer
SEMI Equip
Semiconductors (SIA)
Passive Components
PCBs
Component Distributors
Large EMS (excl Foxconn)
ODM
PCB Process Equipment
Materials
PCB Laminate
% Change
20140302
US$ equivalent at fluctuating exchange; based upon industry composites including acquisitions

European Electronic Supply Chain Growth
4Q’13 vs. 4Q’12
0
0
3
-6
-2
10
8
7
6
-2
5
-8 -6 -4 -2 0 2 4 6 8 10 12
Office equipment
Medical electronics
Domestic Electric Appliances
Motor Vehcles
Airplane/Aerospace
Semiconductors (SIA in euros)
Electronic components & boards
Loaded electronic boards
Wiring devices
% Change
20140212
Euro denominated growth rates; Eurostat, SIA & Custer Consulting Group

U.S Electronic Supply Chain Shipment Growth
4Q’13 vs. 4Q’12
0
4
-4
-3
-2
-6
14
6
1
17
0
3
1
3
-10 -5 0 5 10 15 20
Electromedical, Measurement & Control
Search & Navigation
Computer Related
Communication
Defense
Automotive
Airplane/Aerospace - non Defense
Airplane/Aerospace - Defense
Semiconductors to N America
Small EMS
PCBs
Passive components
Industrial Production
% Change
20140304

Electronic
Equipment
Markets of Interest

Changing
Electronic
Equipment
Markets

Smart Connected Device Shipments by Type
Gartner 1/14
20140114
2012 2013 2014 2015
Oth Ultramobile (Hybrid &
Clamshell)
9 17 40 64
Mobile Phone 1,746 1,804 1,893 1,965
Tablet (ultramobile) 120 180 263 325
PC (Desktop & Notebook) 341 299 278 268
0
500
1,000
1,500
2,000
2,500
3,000
Units (millions)

World Motor Vehicle Production by Geography
2013
Autos, Trucks & Busses
TOTAL: 86.7 Million Units
18.8%
14.3%
10.6%
24.8%
17.3%
14.3%
Vehicles
N America
W Europe
Japan
China (PRC)
Rest of Asia
ROW

Automotive Equipment Suppliers
Autoliv, Borg Warner, Continental AG, Delphi, Federal Mogul, Gentex, Johnson Controls, Lear,
TRW Automotive, Valeo, Visteon
20140225
-10.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
$ Billions
Revenue
Income
Inventory
+9.4%

U.S. Vehicle Shipments
0
5
10
15
20
25
30
1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Lt Trucks & Utility Vehicles Heavy Duty Trucks Automobiles
www.census.gov/indicator/www/m3
20140204
US$ Billion

Aviation, Government
&
Military Electronics

U.S. Aircraft & Parts Shipments
0
2
4
6
8
10
12
14
16
18
20
1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Non-Defense Defense
www.census.gov/indicator/www/m3
US$ Billion
20140301

Military Equipment
General Dynamics, Harris, Lockheed, Northrop Grumman, Raytheon, Rockwell Collins
20140209
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
$ Billions
Revenue
Income
Inventory
- 4.1%

Global Military Equipment Shipment Growth
12/12 & 3/12 Rate of Change
Industry sector sales composite
20140209
0.85
0.95
1.05
1.15
1.25
1.35
Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20132014
RateofChange
12/12 3/12 0 Growth

U.S. Defense Capital Goods
Orders & Shipments
20140301
0
5
10
15
20
25
30
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20132014
Thousands
Orders
Shipments

U.S. Military Electronics Orders & Shipments
Defense Communication & Search & Navigation Equipment
20140204
0
1
2
3
4
5
6
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Thousands
Orders
Shipments

U.S. Government & Military Electronics
Production by Type
2013
Electronic Outlook
TOTAL: $83.5 Billion
7.0%
7.7%
27.5%
25.7%
0.7%
10.6%
14.4%
0.8% 5.6%
Vehicles
RADAR
GUIDANCE/CONTROL
COMM & NAVIGATION
ELECTRONIC
WARFARE
SIMULATION & TRAIN
COMPUTER
ELECTRO-OPTICAL

More Details
Available
for each
Category

U.S. Government & Military Electronics
Communication & Navigation
2013
Electronic Outlook
9%
22%
22%9%
14%
15%
2%
5%
2%
Vehicles Telecommunication
Radio Communication
Microwave communication
Comm Checkout & Support
Other Communication
Airborn Navigation
Surface/marine/ground nav.
Underwater navigation
Nav checkout & support

Instruments & Control
Equipment

U.S. Electromedical, Measurement & Control Equipment
Orders & Shipments
20140204
4
5
5
6
6
7
7
8
8
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Orders
Shipments

U.S. Industrial Electronics Production
2013
Electronic Outlook
26.6%
25.1%
9.7%
15.0%
0.6%
11.7%
11.2%
Vehicles
Controls
Production Equipment
Production Support/Serv
Environmental Systems
Appliance Controls
Other Ind Elec
All Other
Note: Similar data available for other electronic equipment sectors

U.S. Instrumentation Equipment Production
2013
8.0%
4.1%
53.2%
20.7%
1.3%
1.4%
8.2%
3.3%
$
Test & Measurement
Automatic Tester
Medical
Analytical
Nuclear Instrument
Optical & Ultrasonic
Avionic
Other

Instruments & Control Equipment
Agilent, Ametek, Emerson, Itron, Keithly, LeCroy, PerkinElmer, Rockwell Automation, Teledyne,
ThermoFisher, Varian, Woodward Govenor
20140222
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
$ Billions
Revenue
Income
Inventory
3.4%

Rank Company 2011 Sales $M 2011/2010 Growth
1 Danaher (T&M div) 3,391 19.7%
2 Agilent Technologies (EMG div) 3,316 19.1%
3 Teradyne 1,429 -8.8%
4 Rohde & Schwarz 1,300 private
5 Advantest (semiconductor test div) 1,272 52.6%
6 National Instruments 1,024 17.3%
7 Anritsu (T&M div) 882 31.9%
8 Yokogawa (T&M div) 436 -0.7%
9 Aeroflex (ATS div) 348 -1.6%
10 Electro Rent 220 43.1%
11 LeCroy 194 25.7%
12 LTX-Credence 179 -30.3%
13 McRath RentCorp (TRS RenTelco div) 125 16.2%
Test & Measurement Equipment Suppliers
Public Companies
Frost & Sullivan 6/12

Danaher Corp.
CY
20140201
0.0
1.0
2.0
3.0
4.0
5.0
6.0
Q1Q2Q3 Q4Q1Q2Q3Q4Q1 Q2Q3Q4Q1Q2Q3 Q4Q1Q2Q3Q4Q1 Q2Q3Q4Q1Q2Q3Q4 Q1Q2Q3Q4Q1Q2 Q3Q4
2005 2006 2007 2008 2009 2010 2011 2012 2013
$ Billions
Revenue
Income
Inventory
DHR
+ 6%

Medical Equipment
Analogic, Bio-Rad Laboratories, Boston Scientific, Bruker, CareFusion, Covidien, Draeger, Guidant,
Hill-Rom, Intuitive Surgical, Invacare, Kinetic Concepts, Medtronic, ResMed, St Jude Medical, Smith &
Nephew, STERIS, Stryker, Varian Medical, Waters, Zimmer, Zoll
20140222
-5
0
5
10
15
20
25
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
$ Billions
Millions
Revenue
Income
Inventory
+0.1%

U.S. Medical Instrument Production
2013
15.2%
4.1%
33.4%
22.5%
1.3%
Vehicles
Diagnostic
Therapeutic
Other Medica Instr
Radiologic
Nuclear Medicine

Medtronic Inc
CY
20140221
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
19992000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
$ Billions
Revenue
Income
Inventory
MDT
+ 3%

Medical Semiconductor Market Forecast
IC Insights 12/13
3.2
3.6
4.0 4.1
4.4
4.9
5.6
6.5
6.8
-5%
14%
10%
5%
7%
12%
15% 16%
4%
-0.1
-0.05
0
0.05
0.1
0.15
0.2
0.25
0.3
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
2009 2010 2011 2012 2013 2014 2015 2016 2017
US$ billions
20131222
% Change

Communication Equipment Suppliers
Composite of 20 Companies
10 mobile phone makers, 10 other telecom equipment makers plus estimate of other mobile makers
3COM, ADC Telecom, Alcatel+Lucent, Ciena, Ericsson, Motorola Solutions,, Nokia, Polycom, TellLabs, Palm ; Apple
iPhone, HTC, Huawei Device, LG, Motorola Mobility, Nokia, RIM, Samsung, Sony Mobility, ZTE; Euros & Krona converted
at fluctuating exchange; mobile phone volumes from company reports & Gartner Dataquest quarterly unit shipment
estimates; historical data included for acquired companies
20140209
-40
-20
0
20
40
60
80
100
120
140
160
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
$ Billions
Millions
Revenue
Income
Inventory
+ 16.8%Preliminary 4Q’13
results; smartphones
driving growth

U.S. Communication Equipment
Orders & Shipments
20140301
0
2
4
6
8
10
12
14
16
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20132014
Thousands
Orders
Shipments

"Internet" Equipment Suppliers
ADTRAN, Cisco Systems, Extreme Networks, Juniper Networks, Mattson Technology, Netgear,
Sierra Wireless, Sonus Networks, Sycamore
20140222
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
$ Billions
Revenue
Income
Inventory
-4.9%
Large
Cisco
Decline

Layer 2/3 Ethernet Switch Vendors
3Q’13
www.idc.com 3Q'13 World Total US$ 5.36 Billion
62.6%
9.4%
3.6%
2.7%
2.0%
19.8%
$
Cisco
HP
Alcatel-Lucent
Juniper
Dell
Others

Cisco Systems
CY
20140214
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
$ Billions
Revenue
Income
Inventory
CSCO
- 8%
$639 M due to Scientific
Atlanta acquisition

U.S. Computers & Related Products
Orders & Shipments
20140301
0
2
4
6
8
10
12
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20132014
Thousands
Orders
Shipments

Makeup of Personal Computer Market
IC Insights 5/12
20121027
2009 2010 2011 2012 2013 2014 2015
Tablets 1 17 63 110 160 249 341
Netbooks 26 27 15 8 6 5 4
Notebooks 137 167 184 205 225 253 279
Desktops 146 155 154 155 153 156 159
0
100
200
300
400
500
600
700
800
900
1,000
2010-2015 CAGR
Tablets + 82.9%
Netbooks - 31.7%
Notebooks + 10.8%
Desktops + 0.5%
Units (millions)

World Server Shipment Revenue
Gartner Dataquest 2/14 & prior reports
0
2
4
6
8
10
12
14
16
18
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
2005 2006 2007 2008 2009 2010 2011 2012 2013
Revenue
US$ Billions
20140226
-6.6%

World Server Shipments
4Q’13
Gartner Dataquest 2/2014
28.1%
26.5%
15.2%
4.7%
4.2%
21.3%
HP
IBM
Dell
Cisco
Oracle
Others

Industrial Robots: Share by Market
IFR 1/14
39.7%
20.5%
8.6%
7.2%
3.1%
21.0%
Automotive
Electronics/Electrical
Metals/Machinery
Chemical, Rubber &
Plastics
Food & Beverage
Other
159.3 Million Units in 2012

Industrial Robots: Sales by Region
IFR World Robotics 2013
20140505
2006 2007 2008 2009 2010 2011 2012
Total 111.1 114.4 113.0 60.0 120.6 166.0 159.3
India 0.8 0.9 0.9 0.4 0.8 1.5 1.5
ROW 2.6 2.8 1.7 1.0 3.7 9.2 7.2
Asia Pacific 5.9 4.3 6.8 3.6 8.7 11.1 12.0
China 5.8 6.6 7.9 5.5 15.0 22.6 23.0
S Korea 10.8 10.1 11.6 7.8 23.5 25.5 19.4
N America 17.4 18.7 16.2 8.4 16.4 24.3 26.3
Japan 37.4 36.1 33.1 12.8 21.9 27.9 28.7
Europe 30.4 34.9 34.7 20.5 30.7 43.8 41.2
111.1 114.4 113.0
60.0
120.6
166.0
159.3
0
20
40
60
80
100
120
140
160
180
200
Units (000)

Robots: Accelerating Demise of Factory Jobs?

World Semiconductor Shipments
Monthly US$
SIA
20140303
0
5
10
15
20
25
30
Jan
Aug
Mar
Oct
May
Dec
Jul
Feb
Sep
Apr
Nov
Jun
Jan
Aug
Mar
Oct
May
Dec
Jul
Feb
Sep
Apr
Nov
Jun
Jan
Aug
Mar
Oct
May
Dec
Jul
Feb
Sep
Apr
Nov
Jun
Jan
Aug
Mar
Oct
May
Dec
Jul
Feb
Sep
Apr
Nov
Jun
Jan
Aug
Mar
Oct
May
Dec
83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 1314
Thousands
3-Month AvgUS$ Billions (3-month average)
2009 recession
much sharper
but shorter
than 2001

Total Semiconductor Shipments to an Area
Monthly Shipments - Reporting Firms
SIA website: www.sia-online.org/
20140303
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
Jan
Jun
Nov
Apr
Sep
Feb
Jul
Dec
May
Oct
Mar
Aug
Jan
Jun
Nov
Apr
Sep
Feb
Jul
Dec
May
Oct
Mar
Aug
Jan
Jun
Nov
Apr
Sep
Feb
Jul
Dec
May
Oct
Mar
Aug
Jan
Jun
Nov
Apr
Sep
Feb
Jul
Dec
May
Oct
Mar
95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Japan
N America
Europe
Asia-Pac
$B (3-month average) SE Asia

N American Semiconductor Shipments
Monthly & 3-Month Average Shipments
SIA website: www.sia-online.org/
20140303
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
Jan
Jun
Nov
Apr
Sep
Feb
Jul
Dec
May
Oct
Mar
Aug
Jan
Jun
Nov
Apr
Sep
Feb
Jul
Dec
May
Oct
Mar
Aug
Jan
Jun
Nov
Apr
Sep
Feb
Jul
Dec
May
Oct
Mar
Aug
Jan
Jun
Nov
Apr
Sep
Feb
Jul
Dec
May
Oct
Mar
95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Thousands
Month
3-Month Avg
$ Billions

Semiconductor Shipments to N. America
vs. U.S Electronic Equipment Production
Total $ Semiconductor Shipments from All Countries to N. America www.sia-online.org/
U.S. Electronic Equipment Shipments www.census.gov/indicator/www/m3/
20140303
0.3
0.5
0.7
0.9
1.1
1.3
1.5
1.7
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Semiconductors
El Equip
3/12 Rate of Change(US$)

Semiconductor Fab, Assembly,
Packaging,Test & Measurement
Equipment

Semiconductor Capital Equipment Shipments
by Area
www.semi.org, www.seaj.or.jp/ 9/13
20130914
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
ROW
China
Taiwan
S Korea
N America
Japan
Europe
$ Billions

Semiconductor Fab, Test & Measurement
Applied Materials, ASM Intl, ASML, Advantest, KLA Tencor, Novellus, Hitachi Hi Tech, Lam Research, BTU,
LTX-Credence, FEI, FSI, Intervac, Kulicke & Soffa, MKS Instruments, Rudolph, Teradyne, Ultratech Stepper,
Varian semiconductor, Veeco
20140222
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
US$ Billions @
fluctuating
exchange
Chart Title
Revenue
Income
Inventory
+33%

Global Semiconductor & Semiconductor Capital Equipment
3-Month Shipment Growth Rates on $ Basis
Sources: SIA; Semiconductor Equipment Association of Japan, www.semi.org, Custer
Consulting Group SEMI equipment sector composite growth
20140303
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Jan
Aug
Mar
Oct
May
Dec
Jul
Feb
Sep
Apr
Nov
Jun
Jan
Aug
Mar
Oct
May
Dec
Jul
Feb
Sep
Apr
Nov
Jun
Jan
Aug
Mar
Oct
May
Dec
Jul
Feb
Sep
Apr
Nov
Jun
Jan
Aug
Mar
Oct
May
Dec
Jul
Feb
Sep
Apr
Nov
Jun
Jan
Aug
Mar
Oct
84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Semiconductors
SEMI Capital Equip
Zero Growth
3/12 Rate of Change

Passive Components
Composite of 11 Companies
AVX, Bel Fuse, Diodes, International Rectifier, Littlefuse, Murata, RF Micro, Rohm, Vishay, TDK,
Yageo;
Euros, Yen & NT$ converted to US$ at fluctuating exchange rates
20140214
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
$ Billions
Revenue
Income
Inventory
+1.8%

U.S. Production: "Other" Electronic Components
(excludes semiconductors)
Orders & Shipments
http://www.census.gov/indicator/www/m3/
20140208
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Thousands
Orders
Shipments
$B (Seasonally Adjusted)
Calendar Year

World PCB Monthly Shipments
Source: Custer Consulting Group
20140221
0.0
1.0
2.0
3.0
4.0
5.0
6.0
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
Thousands
ROW
Rest of Asia
Korea
Taiwan/China
Japan
Europe
N America
US $ Billions
Calendar Year

World PCB Shipments (with forecast)
20140222
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
Actual
Forecast
+1.3%
-1.1%
$ Billions
Source: Custer Consulting Group - 2010 base year expanded by monthly growth of
N. American, European, Japanese & Taiwan/China monthly PCB shipments
Calendar Year
Growth calculations:
Europe = Eurostat “Wiring Device”
Japan & N. America from JPCA & IPC data
Taiwan/China:46 rigid & flex company
composite
Rest of Asia growth = Taiwan/China 44
company composite
Includes S Korea data for 2011-2013
+4.9
%

2012 World PCB Production by Region
IPC 8/13
5.0%
4.5%
14.7%
42.8%
12.6%
13.4%
6.6%
0.4%
N America
Europe
Japan
China/HK
Taiwan
S Korea
Rest of Asia
ROW
20130831
Total: $60.0 Billion
(US$ M @ Average 2012 Exchange)

2012 World PCB Production by End Market
IPC 9/13
20.1%
34.2%
17.8%
3.9%
9.3%
2.5%
4.5%
7.7%
PC/Office
Communication
Consumer
Defense/Space
Industrial
Medical
Others
Automotive
20131111
Total: $60 Billion

Rank Maker Country US$M
1 Nippon Mektron Japan 2,888
2 Unmicron Taiwan 2,383
3 SEMCO Korea 2,002
4 Young Poong Group Korea 2,000
5 Ibiden Japan 1,924
6 Zhen Ding Taiwan 1,512
7 Tripod Taiwan 1,396
8 TTM Technologies USA 1,310
9 Sumitomo Denko PC Japan 1,219
10 Daeduck Group Korea 1,147
11 HannStar Board (GBM) Taiwan 1,112
12 Viasystems Group Inc USA 1,080
13 Nanya PCB Taiwan 1,007
14 Kingboard PCB Group HK/China 935
15 CMK Corp Japan 908
16 Shinko Electric Japan 869
17 Mflex USA 819
18 Kinsus (+Plotek) Taiwan 788
19 Compeq Taiwan 783
20 Meiko Electronics Japan 759
21 TPT (Taiwan Techvest) Taiwan 722
22 AT&S Austria 698
23 Multek USA 650
24 WUS Group Taiwan 644
25 LG Innotek Korea 600
World’s Top PCB Companies - 2012
20131111
Dr Hayao Nakahara, N.T. Information Ltd 9/2013

N American Rigid & Flexible PCB
Shipments & Orders
20140204
0
50
100
150
200
250
1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11
2008 2009 2010 2011 2012 2013
Shipments
Orders
2013/2012 Rigid & Flex
PCB Shipment Growth:
-1.9%
Note: IPC survey captures "market" not domestic production. About 15% of the above
represents imported boards resold by N American PCB producers in survey.
$M (statistical sample of about 50% of producers)
IPC

U.S. Electronic Equipment vs. Rigid & Flex PCBs
$ Order Growth
20140301
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
Jan
Jun
Nov
Apr
Sep
Feb
Jul
Dec
May
Oct
Mar
Aug
Jan
Jun
Nov
Apr
Sep
Feb
Jul
Dec
May
Oct
Mar
Aug
Jan
Jun
Nov
Apr
Sep
Feb
Jul
Dec
May
Oct
Mar
Aug
Jan
Jun
Nov
Apr
Sep
Feb
Jul
Dec
May
Oct
Mar
95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
PCB
Equipment
Zero Growth
3/12 Rate of Change
IPC & U.S. Dept of Census
Inventory builds and excess orders
Inventory/order corrections

2012 Vertical Markets for PCBs in N America
(US$)
WECC 8/2013
26%
15%
11%
11%
32%
2%
11.0%
Military/Aerospace
Computers
Industrial
Instrument/Medical
Communications
Automotive
Consumer
20130912
Total: $3.0 Billion

EMS & ODM Estimated Global Revenue
vs. Total Available Market
20131119
2009 2010 2011 2012 2013 2014 2015
ODM 227 308 299 270 272 299 320
EMS 75 86 96 116 105 110 115
TAM 1195 1284 1388 1394 1399 1485 1614
1195
1284
1388 1394 1399
1485
1614
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
$ Billions
ODM
EMS
TAM
Custer Consulting Group 11/13, TAM = 0.7* Electronic Equipment Production at Fluctuating Exchange

2013/2012
2012 2013 Growth %
Hon Hai (Foxconn) Taiwan 141,122 133,349 -6%
Flextronics Singapore 24,670 24,197 -2%
Jabil Circuit USA 17,462 18,200 +4%
Sanmina-SCI USA 6,086 5,872 -4%
Celestica Canada 6,507 5,809 -11%
Benchmark Elec USA 2,468 2,450 -1%
Plexus USA 2,308 2,232 -3%
Venture Mfg Singapore 1,912 1,831 -4%
Sypris USA 342 331 -3%
Total 202,877 182,386 -10%
Large Global EMS Providers
20131117
Sources: Company data, 4Q’13 estimated by Custer
Local currency converted at fluctuating exchange
2012 vs. 2013 Sales ($M)

Large EMS Providers
Benchmark+Pemstar, Celestica, Flextronics+Solectron, Foxconn, Jabil, Plexus, Sanmina-SCI,
Sypris, Venture Mfg
-20.0
-10.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
US$ Billions @
fluctuating
exchange
Revenue
Income
Inventory
+7%
20140208
-1%
Q1'14/Q1'13
Guidance

Large EMS Providers
Benchmark+Pemstar, Celestica, Flextronics+Solectron, Jabil, Plexus, Sanmina-SCI, Sypris,Venture Mfg
20140208
-40
-30
-20
-10
0
10
20
30
40
50
60
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Excludes Foxconn

Foxconn Electronics (Hon Hai), Taiwan
CY
20140115
0
200
400
600
800
1000
1200
1400
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
NT$ (Billions)
Revenue
Income
Inventory
2317
+17%

Flextronics
CY
20140201
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
19992000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20132014
$ Billions
Revenue
Income
Inventory
+ 17%
5.9-6.3
1/29/14
FLEXFY ends March 31

Plexus Corp
CY
20140126
-100
0
100
200
300
400
500
600
700
19992000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20132014
$ Millions
Revenue
Income
Inventory
+ 1%
535-565
1/15/14
PLXSFY ends September

Medium Size EMS Providers
CTS, Keytronic, LaBarge, NamTai, Nortec, Raven, Sigmatron, Sparton, Sypris, Winland
20131127
-200
0
200
400
600
800
1000
1200
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
$ Millions
Revenue
Income
Inventory
-6%

Nortech Systems Inc
CY
20131119
-5
0
5
10
15
20
25
30
35
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
$ Millions
Thousands
Revenue
Income
Inventory
NSYS
+ 7%

Raven Industries Inc
CY
20131127
0
20
40
60
80
100
120
140
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
$ Millions
Thousands
Revenue
Income
Inventory
RAVN
+ 8%

Sypris Solutions
CY
20131119
-150
-100
-50
0
50
100
150
200
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
$ Millions
Revenue
Income
Inventory
SYPR
- 3%

SigmaTron International, Inc
CY
-20
-10
0
10
20
30
40
50
60
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
US$ (Millions)
Thousands
Revenue
Income
Inventory
20140126
SGMA
+ 7%

SMTC
CY
20131119
-100
-50
0
50
100
150
200
250
300
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
US$ (Millions)
Revenue
Income
Inventory
- 4%
TSE.SMX

Sparton Corporation
CY
20140207
-20
0
20
40
60
80
100
19992000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
$ Millions
Revenue
Income
Inventory
SPA
+ 28%

EMS Inventories/Sales
9 Large & 12 Medium Sized Companies
Large: Benchmark+Pemstar, Celestica, Flextronics+Solectron, Foxconn, Jabil, Plexus, Sanmina-SCI,
Sypris, Venture Mfg
20140208
0.15
0.25
0.35
0.45
0.55
0.65
0.75
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Large Medium
Medium: CTS, Keytronic, LaBarge, NamTai, Nortec, Raven, Sigmatron, Sparton, Sypris, Winland
Ratio: Inventories/Sales

2013/2012
2012 2013 Growth %
Foxconn (Hon Hai) 136,515 133,238 -2%
Pegatron 30,800 32,029 +4%
Quanta Computer 33,400 29,666 -11%
Compal Electronics 23,567 23,341 -1%
Wistron 22,869 21,793 -5%
Inventec 15,406 15,537 +8%
Asustek Computer 15,237 15,616 +2%
Chimei Innolux 16,241 14,244 -12%
Lite On Technology 7,266 7,171 -1%
Total 301,301 292.635 -3%
Large Taiwan ODM Providers
20140110
Source: Company data, NT$ converted at constant avg 2013 exchange (29.672 NT$ = 1US$)
Consolidated company sales (to be updated soon to consolidated sales)
2012 vs. 2013 Sales ($M)

Taiwan ODM Companies
Composite Sales of 11 Large Manufacturers
20140114
0
100
200
300
400
500
600
700
800
900
1,000
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Jan 2014 was 3.8% below
Jan 2013 and 25%
sequentially below Dec 2013
NT$ (Billions)
Asustek Computer, Chei Mei, Compal Electronics, Foxconn, Chimei Innolux , Inventec, Inventec Appliance, Lite On
Technology, Mitac International, Pegatron, Quanta Computer, Wistron, Chei Mei Display replacing Chei Mei &
Innolux Display 3/10 & later
Calendar YearCompany Financial Releases

Large ODM Companies
Composite of 10 Public Manufacturers
Asustek Computer, Compal Electronics, Foxconn, Chimei Innolux, Inventec, Inventec Appliance, Lite
On Technology, Mitac International, Pegatron, Quanta Computer, Wistron
20140114
-40
-20
0
20
40
60
80
100
120
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Structure of European EMS Industry
2012
Reed Electronics Research 12/12
13.27
3.39
3.75
5.55
Group 1 Group 2
Group 3 Group 4
20140118
Group 1 Group 2
Group 3 Group 4
Number of Companies
Turnover of Each Segment
Eur billion
850+
52
6
19

European EMS by Region
Reed Electronics Research 1/14
2201401180131020
14.6 14.4 14.7 14.9 15.3
15.8
11.0 11.1 11.3 11.4 11.7 12.0
0
2
4
6
8
10
12
14
16
18
2012A 2013E 2014F 2015F 2016F 2017F
CEE, N Africa & Oth
W Europe
Euro (Billions)

Forecasting EMS
Sales
using
Leading Indicators

Global EMS & ODM Companies
Revenue
0
20
40
60
80
100
120
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
US$ Sales @
fluctuating
exchange
Millions
+3.4%
20140208
US $ Billions

IPC Small & Medium N American EMS
Company Revenue Index
0
20
40
60
80
100
120
140
1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11
2007 2008 2009 2010 2011 2012 2013
20140208
Index 2010 avg month = 100

IPC Small/Medium EMS vs
Composite of 53 Public EMS/ODM Companies
Revenue
0
5000
10000
15000
20000
0
20
40
60
80
100
120
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
53 Company
IPC Small/Medium
20140208
US $ Billions

IPC EMS Small & Medium Company
N. American Shipments & Bookings
Markit Economics & ISM
0.70
0.80
0.90
1.00
1.10
1.20
1.30
1.40
1.50
1.60
1.70
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
2007 2008 2009 2010 2011 2012 2013 2014
PMI
Ship
Book
Zero Growth
20140303

IPC Small & Medium Company EMS
vs N. American PCB Shipments
0.70
0.80
0.90
1.00
1.10
1.20
1.30
1.40
1.50
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
2007 2008 2009 2010 2011 2012 2013 2014
PMI
Small/Med EMS
PCB
Zero Growth
20140303

IPC N American Small/Medium EMS vs
Composite Sales of 53 Global EMS/ODM Companies
0.60
0.70
0.80
0.90
1.00
1.10
1.20
1.30
1.40
1.50
1.60
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
PMI
IPC N American
Small/Medium
53 Company EMS/ODM
Zero Growth
20140303

U.S Purchasing Managers Leading Index vs
IPC EMS shipments & bookings
0.70
0.80
0.90
1.00
1.10
1.20
1.30
1.40
1.50
1.60
1.70
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
2007 2008 2009 2010 2011 2012 2013 2014
PMI
EMS Ship
EMS book
Zero Growth
20140303

Global PMI Leading Index vs
Composite Sales of 53 Global EMS/ODM Companies
0.60
0.70
0.80
0.90
1.00
1.10
1.20
1.30
1.40
1.50
1.60
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
PMI
EMS/ODM Shipments
Zero Growth
20140303

U.S PMI Leading Index vs
N American EMS, PCB & Semiconductor Shipments
0.70
0.80
0.90
1.00
1.10
1.20
1.30
1.40
1.50
1.60
1.70
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
May
Jul
Sep
Nov
Jan
Mar
2007 2008 2009 2010 2011 2012 2013 2014
PMI
EMS Ship
PCB Ship
Zero Growth
Semiconductors
20140303

Using This
Information to
Forecast Your
Company’s Sales

Data Sources
• Trade Organizations
• IPC, ZVEI, SIA, SEMI
• Government Statistics
• US Department of Commerce, Eurostat
• Published Market Research Studies
• Company Financial Reports & Consolidated Sector Data
• Leading Indicators
• Purchasing Managers Indices, Conference Board CLI
• Your Own Company’s Sales

Forecasting Your Company Sales
• Organize monthly or quarterly sales in spreadsheet
• Obtain related industry time series for same time period
• Compare industry data and/or leading indicators to your
sales using 3/12 growth rates
• Determine lead times vs. your data
• Forecast your sales based upon lead times
• Estimate your market share gains/losses by comparing
your company growth to a related industry sector
•Custer Consulting Group can assist by providing:
• Historical industry data
• Help with analysis

World 2.5 2.5 3.2 3.9 3.7
USA 2.8 1.9 2.7 3.4 3.3
EU -0.4 0.0 1.2 1.5 1.9
Japan 1.4 1.8 1.9 1.6 1.2
Four Tigers 1.9 2.5 3.6 3.9 3.7
China 7.7 7.7 7.9 8.2 7.7
Henderson Ventures 2/2014
www.hendersonventures.com
2012 2013 2014 2015 2016
GDP Growth
Constant $ Growth Rates Converted @ Constant Exchange Rates
20140209

World 1.0 -2.9 4.7 5.9 5.7
USA -0.9 -3.3 2.7 4.9 5.1
W. Europe -3.4 -4.6 1.6 3.2 3.4
Japan -2.6 -10.3 4.3 4.1 3.2
Four Tigers -1.2 1.8 4.4 5.7 5.4
China 2.6 -2.9 6.2 7.0 6.6
Henderson Ventures 2/2014
www.hendersonventures.com
2012 2013 2014 2015 2016
Electronic Equipment Production Growth
Constant $ Growth Rates Converted @ Constant Exchange Rates
20140209

World Rigid & Flex PCB Production
Converted @ 2012 Exchange Rates except Japan @ 100Y/US$
H Nakahara 2/14
20131111
59.9 59.8 59.8
62.7
64.9
66.6 67.7
0
10
20
30
40
50
60
70
80
2011 2012 2013 2014 2015 2016 2017
Total
Other Asia
Thailand
S Korea
Taiwan
Japan
China
Other Europe
Germany
Americas
$ Billion (@2012 exchange rates)

N. American Supply Chain Forecast
2014 vs. 2013
0 2 4 6 8
Small/Medium
EMS
Semiconductors
PCBs
Electronic
Equipment
Combined GDP
Henderson Ventures
HV
Henderson Ventures
% Change
20140222

Key Points
Ability to target each end market sector by
key companies, size and growth rate
Size & growth of each sector of world & U.S.
electronic supply chain
Leading indicators to forecast domestic and
global EMS growth
Tools & methodology to forecast your
companies growth
Likely N American Small/Medium EMS Growth
about 3% in 2014

Future Presentations
Financial data on small EMS companies
not publicly available
Markets can be very localized
Leading indicators appear very promising
as forecasting tool
Cooperative efforts with individual companies
would be welcome
More work needs to be done

Custer Consulting Group Products
Daily News Services (6 days/week)
- Global electronics supply chain
- Solar/Photovoltaic supply chain
Business Outlook
- Market charts & data
Global market
OEMs
Components, EMS, ODM, materials & process equip
Solar/Photovoltaic
- Weekly Market Comments with latest charts
20111007

Strictly private & confidential
Lincoln International’s Presentation Regarding:
The Dynamic EMS Industry
March 24, 2013

Lincoln International Snapshot
Paris
Frankfurt
Chicago
New York
Los Angeles
London
Vienna
Madrid
Mumbai
Tokyo
Amsterdam
Moscow
São Paulo
Beijing
Americas
▪ Offices in Chicago, Los Angeles
and New York
▪ Office in São Paulo
Europe
▪ Offices in Amsterdam, Frankfurt,
London, Madrid, Milan, Moscow,
Paris and Vienna
Asia
▪ China – Office in Beijing
▪ India – Office in Mumbai
▪ Japan – Office in Tokyo
International Industry-focused Leader
 15 offices with nearly 300 bankers in
key global economies – half outside
the U.S.
 Experienced local bankers with deep
strategic relationships within each
region
 14 global industry groups led by
experienced senior bankers
 Significant transactional experience
and deep relationships within each
sector
 Ranked one of the top two middle
market investment banks in the world(1)
 Ranked as the #1 investment bank for
the sale of private equity owned
businesses for 2013
 Since 2001 has completed more EMS
transactions than any investment bank
in the world
Milan
(1) According to MergerMarket for M&A transactions less than $300
million completed in 2013 (Rothschild was the other top ranked bank)

Contents
Section 1 General Middle Market M&A Environment 1
Section 2 EMS Industry Financial Metrics 3
Section 3 EMS Industry Merger and Acquisition Activity 8
Section 4 Overview and Traditional Drivers of Buyer Valuation 13
Section 5 Long-Term Strategic Outlook: Eliminating the “E” from EMS 16
Section 6 Conclusion 23
APPENDIX
A Officer Bio
2014 - IPC Presentation_v1.4.pptx

T H E O N L Y T R U L Y I N T E R N A T I O N A L , I N T E G R A T E D , I N D E P E N D E N T M I D - M A R K E T A D V I S O R
AMSTERDAM CHICAGO FRANKFURT LONDON LOS ANGELES MADRID MILAN MOSCOW MUMBAI NEW YORK PARIS SÃO PAULO TOKYO VIENNA
General Middle Market M&A Environment
Section 1

9,035
7,250
10,448
11,836 11,455
10,812
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2008 2009 2010 2011 2012 2013
NumberofDeals
 M&A activity has solidly rebounded from great recession levels
in 2009
 The combination of low interest rates and slow growth creates
an ideal environment for M&A
 A more robust M&A market is expected in 2014 due to
increased M&A activity in the second half of 2013 carrying into
2014, as well as continued strength in M&A activity
fundamentals
 Middle market M&A ($10-$500M EV) is expected to continue
driving the majority of deals in 2014
Middle-Market M&A Overview
M&A activity decreased in 2013, but is expected to increase in 2014
Overview Activity
Sponsor Activity
 Financial sponsors have over $400 billion of equity funds to
invest and pressure to deploy this capital
 4,000+ portfolio companies currently need to be exited or
recapitalized
 Continued low interest rates
 Leverage multiples have returned to pre-recession levels,
allowing sponsors to often out pay strategic buyers for assets
Strategic Activity
 $2.2+ trillion of cash on hand to fuel acquisitions, offset
slow organic growth to meet strategic initiatives
 Seeking growth through M&A to counteract the low organic
growth environment
 Increased cross-border activity due to globalization
Yearly M&A Volume (Transaction Size $10M – $500M)
Source: Capital IQ
Section 1: General Middle Market M&A Environment 2

M&A as a Strategic Value Enhancing Tool
Section 2

Sparton Corporation (NYSE:SPA) Acquisition History
November
15th, 2012
June
6th, 2013
August
30thth, 2013
December
11thth, 2013
2014
Sparton acquired Onyx EMS,
LLC, a leading EMS provider
of complex applications to
medical OEMs
Sparton acquired Aydin Displays,
Inc. to add engineered product
content of enhanced flat panel
display and touch-screen solutions
Sparton acquired Creonix LLC, a
leading EMS provider, in order to build
out cable and wire harness engineering
and manufacturing capabilities
Sparton acquired Beckwood Services,
Inc. to provide electromechanical
controls for the machine tool, analytical
instruments and military markets
Section 2: M&A as a Strategic Value Enhancing Tool 4
** Lincoln International involved transaction
**
**

$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14
Sparton Corporation (NYSE:SPA) Acquisition History (continued)
Announcement of
Onyx acquisition
Announcement of
Creonix acquisition
Announcement of Aydin
Displays acquisition
Announcement of Beckwood
Services acquisition $31.6
$12.6
Source: Capital IQ, February 25th, 2014
Share price
Section 2: M&A as a Strategic Value Enhancing Tool 5

EMS Industry Financial Metrics
Section 3

0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
Q1-03 Q1-04 Q1-05 Q1-06 Q1-07 Q1-08 Q1-09 Q1-10 Q1-11 Q1-12 Q1-13
IndexValue
Asof3/31/03
Large Mid Small
EMS Industry Stock Performance
EMS Stock Index
 Small and Mid sized EMS public company stocks have greatly outperformed Large EMS company stocks over the last 10
years
 Since 2002 Small and Mid sized EMS companies have traded at higher valuations than large EMS companies, prior to that
the large companies dominated market valuations
 Large EMS companies searching for opportunities to differentiate and increase margin and create shareholder value
Note: Large index: Celestica, Flextronics, Jabil and Sanmina Corp.; Mid index: Benchmark, CTS Corp, Key Tronic Corp., Nam Tai Electronics, Plexus Corp. and Sypris
Solutions Inc.; Small index: IEC Electronics Corp., Nortech Systems, Sigma Tron International, SMTC Corp. and Sparton Corp.
740%
114%
(25%)
Section 3: EMS Industry Financial Metrics 7

(30.0%)
(20.0%)
(10.0%)
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
Q1-03 Q4-03 Q3-04 Q2-05 Q1-06 Q4-06 Q3-07 Q2-08 Q1-09 Q4-09 Q3-10 Q2-11 Q1-12 Q4-12 Q3-13
Large Mid Small
EMS Revenue Growth Rates
 Small size EMS companies are exhibiting the highest YoY LTM revenue growth rates while Mid and Large (excluding
Foxconn) EMS companies are exhibiting declining revenue growth
 Small size EMS companies are exhibiting YoY LTM revenue growth rates above their respective historical averages
Year-over-Year (YoY) Last Twelve Months (LTM) revenue growth rates
Note: Data sourced from Capital IQ as of the last day of each quarter; Large index: Celestica, Flextronics, Jabil and Sanmina Corp.; Mid index: Benchmark, CTS Corp,
Key Tronic Corp., Nam Tai Electronics, Plexus Corp. and Sypris Solutions Inc.; Small index: IEC Electronics Corp., Nortech Systems, Sigma Tron International, SMTC
Corp. and Sparton Corp.
7.1%
9.2%
5.4%
Averages:
7.9%
(2.4%)
(13.8%)

2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
Q1-03 Q4-03 Q3-04 Q2-05 Q1-06 Q4-06 Q3-07 Q2-08 Q1-09 Q4-09 Q3-10 Q2-11 Q1-12 Q4-12 Q3-13
Large Mid Small
EMS EBITDA Margins Over Time
 Large and Mid size EMS companies are operating above their historical EBITDA margin averages
 Large EMS companies are exhibiting recent margin improvement
Note: Data sourced from Capital IQ as of the last day of each quarter; Large index: Celestica, Flextronics, Jabil and Sanmina Corp.; Mid index: Benchmark, CTS Corp,
Key Tronic Corp., Nam Tai Electronics, Plexus Corp. and Sypris Solutions Inc.; Small index: IEC Electronics Corp., Nortech Systems, Sigma Tron International, SMTC
Corp. and Sparton Corp.
EBITDA Margins
4.8%
6.2%
4.3%
Averages:

0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13
MultipleofEBITDA
Large Mid Small
EMS Company Valuations
Enterprise Value / EBITDA
Note: Data sourced from Capital IQ as of the last day of each quarter; Enterprise Value is calculated as market cap plus debt, preferred equity and minority interest less
cash; Large index: Celestica, Flextronics, Jabil and Sanmina Corp.; Mid index: Benchmark, CTS Corp, Key Tronic Corp., Nam Tai Electronics, Plexus Corp. and Sypris
Solutions Inc.; Small index: IEC Electronics Corp., Nortech Systems, Sigma Tron International, SMTC Corp. and Sparton Corp.
 EMS company valuations in general have improved over the last year
 Small EMS companies are being valued at new historical averages
 Large and small size EMS companies are trading above historical averages; Mid size companies are trading right at
historic averages
6.7x
6.7x
4.9x
Averages:

EMS Industry Merger and Acquisition Activity
Section 4

51
48
24
46
32
29
24
0
10
20
30
40
50
60
2007 2008 2009 2010 2011 2012 2013
#ofTransactions
Total EMS Merger and Acquisition Activity
M&A activity in the EMS industry has decreased since 2010
Transaction volume
 Transaction volume equal with historic lows of 2009
 Activity is indicative of buyers becoming more selective
 Industry unlikely to bounce back to 2007 levels
Section 4: EMS Industry Merger and Acquisition Activity 12

9 9
8
7
2 2
4
5
6
1
0
5
10
2012 2013
#ofTransactions
U.S./Canada Europe Asia Cross-Border (High/High) Cross-Border (High/Low) Other
EMS Merger and Acquisition Activity – by Geography
M&A activity decreased, or remained flat, in all but Cross-Border (High/Low) transactions
Transaction volume by geography
 Cross-Border M&A activity between high-cost regions has exhibited the most growth with year-over-year transaction
volume increasing 25%
 Cross Border activity between high-cost and low-cost regions has exhibited the greatest percentage decrease in activity
with transaction volume down from six to zero
 Transactions between Asian countries have remained flat

13
15
14
10
3 1 1
15
7
10
77
1
2
1
8 8
3
5
0
2
4
6
8
10
12
14
16
2010 2011 2012 2013
#ofTransactions
EMS Consolidations OEM Divestitures Vertical/Horizontal Convergences
EMS Divestitures Private Equity Investments
EMS Merger and Acquisition Activity – by Type
M&A activity in the EMS industry has primarily been concentrated within Consolidations and Convergences
Transaction volume by target company category
 Consolidations continue to be the main source of M&A activity within the EMS industry
 While investment into EMS by private equity is slightly below 2010 levels, Lincoln is currently seeing renewed interest by
private equity in EMS

Traditional Drivers of Valuation and Current Buyer Trends
Section 5

Traditional Drivers of Value
Drivers Commentary
Margin
Growth
 Highest EMS valuations occurred when industry growth rates exceeded 20%
 individual companies that can achieve double digit growth rates will attract higher valuations
 Difficult to sell a business that is in decline
 Historically, EMS valuations were not driven by margin due to extraordinary growth rates
 As the industry has matured margins have become more important than growth
 Average EBITDA margins for high mix providers are 7% - 8%
 Premium valuations are given to companies with double digit EBITDA margins
Customers and End
Markets
 Historically, telecommunications and computing were attractive end markets due to their inherent
growth rates
 Today, medical, military and industrial end markets are valued due to their customers’ higher margin
profiles
 Automotive, which was highly unflavored, has returned as a more promising end market due to a
higher growth rate and a change in auto OEM behavior to allow their supply chain more profitability
 Customer diversity is rewarded over customer concentration
Section 5: Traditional Drivers of Valuation and Current Buyer Directions 17
Capabilities
 Historically automated SMT capability was valued
 Today, overall complexity of work, level of integration and box build are what drives value
 Any unique capabilities add value (e.g. ruggedization, special software integration, etc.)
 Engineering capability is also more valued today
Location
 Historically, globalization was the main driver of value
 Today location is important, but value drivers are more varied (e.g. low cost, proximity to customers,
logistics considerations, etc.)

Current Buyer Interest Trends
Trend Commentary
Outside Acquirers
Looking in the EMS
Industry
Tier I Providers Looking
Outside Typical EMS
Industry for Acquisitions
 Tier I providers are reluctant to acquire mid-size and small EMS companies due to industry maturity
 Customers who do business with mid-size and small EMS companies typically do not want to do
business with Tier Is
 The need to increase margins to create shareholder value and meet Wall Street expectations is
paramount for Tier Is
 Looking outside EMS for higher margin businesses
 Looking internally for cost saving opportunities
 Increasingly building up engineering and IP content
 Manufacturers in contracting industries (e.g. defense) are looking for rapid diversification
 Natel Engineering (leading defense hybrid components manufacturer) acquiring EPIC Technologies
 Mechanical products manufacturers within an end market looking to expand capabilities into electronics
 Duccomun (a mechanical DOD company) acquiring LaBarge
 A current maker of mechanical components for automobile applications actively seeking companies
with electronics expertise
 Companies who dominate a specific niche needing to use acquisitions to achieve external growth
 Leading manufacturer of micro-electronics for communication applications seeking acquisitions
outside their niche including potential EMS companies
Private Equity
Investment Trends
 Leverage multiples have returned to pre-recession levels, which combined with low interest rates and
unvested capital, make private equity more active and competitive buyers
 Fragmentation and relatively low multiples make EMS an attractive industry for the PE model
Mid-tier Consolidations
 Consolidations were the leading type of transaction in 2013 and are expected to repeat in 2014
 Need for scale, geographic expansion and market penetration are driving Mid-tier consolidations
Section 5: Traditional Drivers of Valuation and Current Buyer Directions 18

Long-Term Strategic Outlook: Eliminating the “E” from EMS
Section 6

Valuation of Large Industrial Conglomerates
Section 6: Long-Term Strategic Outlook: Eliminating the “E” from EMS 20
EV / EBITDA Multiples
12.4x
15.2x
12.9x
10.1x
12.7x
9.9x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
16.0x
Actuant Ametek Danaher Emerson
Electric
Teledyne Tech. TE Connectivity
EBITDA Margins
18.2%
26.0%
21.8%
19.6%
14.2%
19.2%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Actuant
Corporation
Ametek Danaher Corp. Emerson
Electric Co.
Teledyne
Technologies
Inc.
TE Connectivity
Ltd.
EMS Average
5.2%
EMS Average
7.5x

Long Term Trend: “DMS”
The 3D vs. Virtual World
“There will always be 3D stuff to build”
EMS companies will convert into Diversified
Manufacturing Services (DMS) companies

Jabil: an Emerging DMS Company
 Focusing the company on engineering and manufacturing “3D stuff”
 Acquisition of Nypro, a leading plastics manufacturer
 Non-electronics account for 30% - 35% of Jabil’s revenue
 Divestiture of Jabil Global Services business to focus company on engineering and
manufacturing excellence

Conclusion
Section 7

Key Takeaways Heading Into 2014
 Expect favorable EMS M&A environment in 2014
 Consolidations will continue
 Increased activity by private equity
 Big EMS companies looking for diversification outside of core EMS business
 Outside companies looking into the EMS market
Every EMS company should think about a DMS strategy
Section 7: Conclusion 25

Bios
Appendix A
AMSTERDAM BEIJING CHICAGO FRANKFURT LONDON LOS ANGELES MADRID MOSCOW MUMBAI NEW YORK PARIS SÃO PAULO TOKYO VIENNA

Jack Calderon
Advisory Expertise
Jack has extensive experience in advising
companies on merger and acquisitions,
restructuring, fairness opinions, and other
strategic matters. In addition to completing
multiple transactions for public company,
private equity, and private owner clients, Jack
also has experience in cross border advisory
work encompassing both Europe and Asia.
Jack has led numerous sell-side and buy-side
transactions. Jack's advisory work is
exclusively focused on the commercial and
defense electronics industries.
Industry Expertise
Jack is an expert in the electronics industry.
He spent 20 years in various operating
management positions in the industry,
beginning with Honeywell and culminating as
CEO of publicly traded EFTC (now part of
Benchmark). Jack is a frequent speaker at
industry events and publishes the quarterly
EMS DealReader which tracks all
transactions in the electronic manufacturing
services (EMS) industry globally, as well as
the EMS Stock Index. Jack is a former
member of the Board of Directors of the IPC
which is the global standards-setting
organization for the manufacture of electronic
products. In addition to the EMS industry, he
focuses on interconnects (circuit boards, flex
circuits, and connectors), defense electronic
products, specialty systems, and design and
product repair service providers.
Managing Director
Past Affiliations
Prior to joining Lincoln International, Jack
served as Chairman and Chief Executive
Officer of EFTC, a publicly traded
electronics manufacturing service provider,
now part of Benchmark Electronics
(NYSE:BHE). EFTC specialized in
manufacturing complex electronics primarily
for the aerospace industry.
Jack began his career in Honeywell's
Aerospace and Defense Group in 1979. In
his 20 year operating career, he held a
variety of positions with several companies
including Program Manager; Vice President
of Marketing and Contracts; Vice President
of Corporate Development; Vice President
and General Manager of Latin American
Operations and Chief Executive Officer.
Academic Credentials
Jack earned a Juris Doctor degree from
The American University, and a Bachelor of
Arts degree in economics, cum laude, from
Case Western Reserve University.
Role at Lincoln International
Jack leads Lincoln International's
Electronics group which includes
Electronic Manufacturing Services
(EMS), Interconnects, and Defense
Electronics. He has extensive
operating and transaction experience in
defense electronics and electronic
manufacturing services. Jack leads
deal teams, manages key client
relationships and markets the firm's
services.
Appendix A: Officer Bio 28

2014 IPC APEX EXPO EMC Management Council

2014 IPC APEX EXPO EMC Management Council

Recomendados

Recomendados

Más contenido relacionado

Similar a 2014 IPC APEX EXPO EMC Management Council

Similar a 2014 IPC APEX EXPO EMC Management Council (20)

Último

Último (20)

2014 IPC APEX EXPO EMC Management Council