Sony and Solectron make it together

Sony Corporation and Solectron Corporation today announced a cooperative agreement whereby Solectron will provide Sony with a range of electronics manufacturing services (EMS).

For its part, Solectron will acquire certain assets associated with two Sony manufacturing facilities: Sony Nakaniida Corporation in Miyagi, Japan, and Sony Industries Taiwan in Kaohsiung, Taiwan. Sony will outsource EMS from these facilities. These facilities currently produce high-end consumer products such as automobile satellite navigation systems, car audio systems and lithium-ion battery packs. Combined, the facilities have about 490,000 square feet of manufacturing space.

Solectron will integrate the two facilities into its global network and offer employment to all affected Sony employees under essentially the same salary and working conditions. Currently, about 1,300 people work at the Sony Nakaniida facility and about 750 people work at the Sony Industries Taiwan facility.

Solectron will also provide electronics manufacturing services to Sony and other customers at the Nakaniida and Kaohsiung site.

Through this joint cooperation, Sony aims to respond sensitively to fluctuations in demand and product cycles by outsourcing part of its production process. This will help create a group manufacturing system that can speedily and flexibly adjust production mix and product volume to the most suitable levels in total. It will also complement Sony’s own Engineering, Manufacturing and Customer Services (EMCS) system which is expected to realise several benefits: improved efficiency, cost reductions, enhanced quality, advanced production technology and customer satisfaction.

For Solectron, the cooperation agreement helps the company establish a strong, full-service presence in Japan and Taiwan, two countries important to the world’s electronics industry. For example, more than a third of the world’s electronics products are manufactured in Japan. In addition, it gives Solectron a foothold into the high-end consumer electronics products market.

In creating the joint cooperation, the two companies have signed a series of agreements. The companies, which did not disclose the financial terms of the agreements, anticipate that the transaction will be closed as soon as possible after all applicable regulatory requirements have been completed in Japan, Taiwan and the United States.