Without Huawei, revenue plummeted, and the Flextronics Zhuhai factory was forced to sell

On December 22, Guangdong Lingyi Zhizao issued an announcement that the foundry Flextronics, which was a sensation last year due to the Huawei incident, once again entered the public’s field of vision.

Without Huawei, revenue plummeted, and the Flextronics Zhuhai factory was forced to sell

Lingyi Zhizao announced that the company plans to acquire 100% equity of Zhuhai Flextronics through its wholly-owned subsidiary Shenzhen Lingyi Technology. Through this equity acquisition, the company will own Zhuhai Flextronics’ land and plant and other assets. The total transaction price is 368 million yuan plus some other assets, all of which are owned by Lingyi Zhizao.

The last time Zhuhai Flextronics appeared in the public eye was because it refused to return Huawei’s equipment and materials a year ago.

On May 15, 2019, the United States issued an embargo on Huawei. Three days later, the news that Flextronics and Huawei would stop cooperating completely. On May 20, Huawei sent 150 large trucks to Flextronics. The relevant materials and equipment of the Zhuhai factory were pulled away, and were also rejected by Flextronics.

Without Huawei, revenue plummeted, and the Flextronics Zhuhai factory was forced to sell

In the subsequent repeated negotiations, Flextronics asked Huawei to promise various guarantee conditions, but finally failed to negotiate, and the result was a complete cessation of production. In July 2019, Huawei also completely eliminated Flextronics from the supply chain system.

After the cooperation with Huawei was cut off, Flextronics’ business in China became less and less, the factories in Changsha also changed hands one after another, and the factories in Zhuhai and Dongguan became depressed due to the sharp reduction in business, and their performance also plummeted.

According to the unaudited data released by Lingyi Zhizao, the revenue of Zhuhai Flextronics in 2019 was 2.8538 million yuan, the net profit was a loss of 317 million yuan, and the revenue from January to November 2020 was 1.5654 million yuan , the corresponding net profit is 23.8316 million yuan!

According to public information, Flextronics was founded in Silicon Valley in the United States in 1969 and set up a factory in Singapore in 1981. It is the first manufacturer in the United States to set up factories overseas, and it is currently the second largest Electronic product OEM in the world after Foxconn. It is also one of the world’s top 500 companies. It used to have factories in Zhuhai, Dongguan, Shenzhen, Changsha, etc.

Back then, Flextronics’ factories in China undertook nearly 40% of Huawei’s foundry business. But now the performance has fallen sharply, and there is no order support. More than a year has passed, and Flextronics is really unable to withstand it. In desperation, it can only sell the Zhuhai factory to its peers.

Regarding the acquisition of the Flextronics Zhuhai factory, Lingyi Zhizao said that after the completion of the acquisition, the company will own Zhuhai Flextronics’ land and plant and other assets, and it will be used as the company’s important production base in the Guangdong-Hong Kong-Macao Greater Bay Area in the future. Business development on products such as complete machine assembly. This acquisition can meet the needs of the rapid expansion of the company’s business, in line with the company’s development strategy goals, and there is no situation that damages the interests of the company and all shareholders.

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