Flextronics sees strong notebook PC growth

TAIPEI, July 13 (Reuters) - Electronics giant Flextronics (FLEX.O) forecast double-digit revenue and shipment growth from its notebook PC operations this year, as it makes a push against more established players, a top executive said on Monday. A key supplier to top brands including HP (HPQ.N), Acer (2353.TW) and Dell (DELL.O), the Singapore-based company expects its notebook PC unit to post a net profit margin similar to other players in the industry.

"Have you seen our profit margins?" Sean Burke, Flextronics' head of its computing unit, asked Reuters in an interview when asked how he intended to deal with the industry's low profit margins.

"The whole industry is operating on very thin margins and we've just got to make it work."

Flextronics recorded a loss of $239 million in the quarter ended March, or a negative proft margin, compared with net profit margins of over 2.5 percent at specialist notebook PC contract manufacturers including Quanta (2382.TW) and Compal (2324.TW).

Burke declined to comment on how much Flextronics earned from its notebook PC segment, but its computing unit, which also makes server computers, recorded revenue of $5.2 billion in the 2008 financial year according to company figures.

However, he said the company had the capacity to manufacture more than 300,000 laptop PCs per month at the beginning of 2009, and that would climb to over 1 million units per month by 2011.

That would translate into sales of about $500 million per month by 2011 if each notebook PC is sold for an average of $500 and its factories run at capacity.

Most top electronics brands choose to outsource production to contract manufacturers such as Flextronics and Hon Hai (2317.TW), which have large production facilities in lower cost countries.