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The decline of the North American contract-manufacturing sector was driven home on Oct. 1, when Singapore's Flextronics International closed its $3.6bn purchase of Solectron, the onetime largest U.S. electronics manufacturer, based in Milpitas, Calif. Like other companies that sprang up in the 1990s to build PCs, telecom equipment, and other gear for brand-name companies, Solectron got clobbered by Asian competitors, such as Flextronics and Taiwan's Hon Hai Precision Industry, which have lower costs for labor, electricity, and land.
Between 2000, just before the dot-com crash, and 2006 Solectron's sales fell from $14.1bn to $10.6bn. Hon Hai, with the bulk of its factories in mainland China, has posted annual revenue increases of 50 percent in recent years, reaching $40bn in 2006.
Source: Business Week, http://www.businessweek.com
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