Vol. 1, No. 1 - July 2026

Jul 29, 2026

Vol. 1, No. 1 - July 2026

The Global Electronics Association has acquired New Venture Research’s EMS market intelligence program. Formerly led by Randall Sherman, NVR has tracked the EMS industry for more than 30 years, and its flagship research has long been regarded as one of the most comprehensive resources on the market. Working now with the Association’s Industry Intelligence team and MMI contributors, we are happy to continue to bring this valuable intelligence tool to you.

First-Half M&A Activity Nearly Quadruples in 2026

The number of M&A transactions in the electronics manufacturing-related industry increased sharply in the first half of 2026 compared with the year-earlier period.

According to MMI’s working count, 34 announced or completed transactions were identified during the first six months of 2026, compared with nine EMS industry transactions in the first half of 2025. This represents a significant rise in deal activity and suggests that companies across the broader electronics manufacturing value chain are again using acquisitions and investments to expand manufacturing capability, deepen technology portfolios, and improve regional positioning.

The increase should be viewed with some caution because the 2026 dataset includes a broader range of electronics manufacturing-related transactions, including EMS, PCB, semiconductor manufacturing, test, packaging, electronic components, hardware manufacturing, and related supply-chain capabilities. In addition, several transactions were announced or pending during the period rather than fully completed. Still, the first-half activity points to a clear shift: buyers are not only acquiring scale, but also targeting specific manufacturing capabilities that support growth areas such as AI infrastructure, power electronics, advanced packaging, photonics, aerospace and defense electronics, and regional supply-chain resilience.

Service and supply-chain extension deals were the dominant category in the first half of 2026, accounting for 22 of the 34 transactions identified by MMI.

This category includes acquisitions or investments aimed at expanding technology capability, manufacturing depth, semiconductor or component expertise, PCB capability, test capability, or access to specialized production assets. The size of this category indicates that dealmakers are looking beyond traditional EMS consolidation and are increasingly focused on acquiring specific capabilities that can strengthen customer offerings or position companies in faster-growing end markets.

Several transactions illustrate this pattern. Cyient Semiconductor’s majority investment in Kinetic Technologies added power management capability, while Credo Technology’s acquisition of DustPhotonics expanded its position in optical interconnect technology.

SiTime’s acquisition of Renesas’s timing business and Marvell’s acquisition of XConn Technologies also point to the importance of high-performance electronic components and interconnect technologies in supporting next-generation infrastructure. In semiconductor manufacturing, Micron’s purchase of a Taiwan fab site and Hua Hong’splanned wafer foundry acquisition highlight the continued importance of manufacturing capacity and regional production assets.

The acquisition of CM operations by other contract manufacturers accounted for five transactions in the first half of 2026. These deals remain important because they directly expand manufacturing footprint, customer access, and production capacity. While the number of CM-to-CM transactions was lower than service and supply-chain extension deals, the category continued to show that classic consolidation remains part of the industry’s playbook.

Notable transactions in this category included NOTE AB’s acquisition of Surface Technology International, Voltatron’s acquisition of Komitec Electronics GmbH, Karkhana’s acquisition of Micron EMS Tech, StenTech’s acquisition of Pentagon EMS, and ICAPE’s acquisition of Tekube PCB activities. These transactions reflect the continuing appeal of acquiring established electronics manufacturing operations rather than relying entirely on organic expansion. For buyers, such deals can provide immediate access to customers, engineering capabilities, production assets, regional presence, and skilled labor.

OEM divestitures or business-line transfers accounted for four transactions in the first half of 2026. These included ams OSRAM’s sale of its CMOS image sensor business, Ushio’s transfer of its semiconductor laser business to Kyocera, SiTime’s acquisition of Renesas’s timing business, and ams OSRAM’s sale of a non-optical analog and mixed-signal sensor business to Infineon. While OEM divestitures are no longer as prominent as they were in earlier EMS industry cycles, they continue to create opportunities for buyers to acquire focused technology or manufacturing assets that may no longer be core to the seller’s strategy.

Private equity investment accounted for three transactions in the working 2026 list. These included KKR’s tender offer for Taiyo Holdings, DBAG’s investment in Hipp Technology Group, and a tender-offer-related transaction involving Eles Semiconductor that requires further verification. Private equity activity remains selective, but the presence of these deals suggests that financial buyers continue to see value in electronics manufacturing and adjacent technology assets, especially where businesses have defensible capabilities, specialized customer bases, or exposure to structural growth areas.

By target region, Asia accounted for the largest number of transactions, with 13 deals, followed by North America and EMEA with 10 transactions each. One transaction was classified as multiregion.

The strong showing in Asia was driven largely by semiconductor manufacturing, electronic components, and PCB-related transactions. North American activity was supported by hardware manufacturing, power, photonics, aerospace and defense electronics, and semiconductor-related deals. EMEA activity was led by EMS consolidation, PCB activities, private equity investment, and sensor or component-related transactions.

The regional distribution suggests that 2026 deal activity is being shaped by both capability and geography. Asia remains central to semiconductor and component supply chains, while North America continues to attract investment linked to high-complexity hardware, AI infrastructure, aerospace and defense, and reshoring-sensitive applications. EMEA remains active in EMS, PCB, sensor, and specialized manufacturing transactions, reflecting ongoing consolidation opportunities and the need for regional production options close to European customers.

The first-half 2026 pattern also shows that traditional EMS consolidation is no longer the only lens through which to view M&A activity. The broader electronics manufacturing value chain is becoming more interconnected. EMS providers, semiconductor manufacturers, PCB companies, component suppliers, and hardware technology companies are all using transactions to reposition themselves around new demand pools. In many cases, the strategic rationale appears to be capability-driven rather than purely scale-driven.

This capability focus is particularly visible in AI-related infrastructure and semiconductor-adjacent transactions. Demand for AI servers, data-center power, liquid cooling, high-speed interconnects, advanced packaging, test capacity, and specialized components is changing the types of assets buyers want. As a result, some of the most relevant transactions in 2026 are not traditional EMS acquisitions, but acquisitions of adjacent manufacturing and technology capabilities that support the electronics manufacturing ecosystem.

The most important takeaway from the first half of 2026 is that buyers are using M&A to acquire manufacturing capability, regional access, and exposure to higher-growth electronics markets. Service and supply-chain extension deals led the period, while CM-to-CM consolidation remained present but less dominant. Regional activity was broad, with Asia, North America, and EMEA all contributing meaningfully to the first-half deal count.

Taken together, the geographic data reveals a broader strategic pattern. Buyers are increasingly pursuing assets that complement the strengths of each region rather than pursuing scale for its own sake. Asia is attracting investments tied to manufacturing depth and supply-chain control; North America is drawing interest because of its technology and innovation base; and EMEA remains attractive for regional manufacturing platforms and consolidation opportunities. This suggests that future M&A activity may become even more specialized, with buyers targeting specific regional advantages rather than broadly expanding capacity.

Another notable trend in Asia was the emphasis on technology ownership and production control. Transactions involving semiconductor fabs, timing technologies, power management devices, and component manufacturing indicate that buyers are seeking greater control over critical technologies and supply chains.

North America accounted for 10 transactions. Transactions involving DustPhotonics, XConn Technologies, and other technology-focused businesses illustrate how buyers are targeting intellectual property, engineering expertise, and differentiated product portfolios.

Cross-border activity was another notable feature of the first-half dataset. Many transactions involved buyers acquiring assets outside their home regions, highlighting the increasingly global nature of electronics manufacturing M&A.

If this level of activity continues through the second half, 2026 could become one of the more active recent years for electronics manufacturing-related M&A. The final result will depend on whether announced transactions close, whether additional first-half deals become known, and whether the second half sustains the current pace. For now, the first-half data points to a more active and capability-driven M&A environment than the EMS industry saw in 2025.

Editor’s note: First-half 2026 statistics published here should be treated as preliminary. It is possible that MMI will become aware of additional first-half transactions after this article is published.

Economic Update

By Dr. Shawn DuBravac, Chief Economist

The electronics manufacturing economy entered the second half of 2026 pulled in two directions. Demand, particularly AI-linked demand, continues to run well ahead of the broader industrial economy, while energy costs, tariffs, and a hawkish turn in monetary policy press on margins from the other side. The second half will be defined by how well manufacturers manage the gap between strong, but narrow demand, and tough headwinds.

In the U.S., fundamentals remain constructive. The ISM Manufacturing PMI registered 53.3% in June, its sixth consecutive month in expansion territory, down modestly from May’s 54%, which was the strongest reading since May 2022. Computer and electronic products were among the four largest manufacturing industries reporting increased new orders in June, with the overall New Orders Index at 56%. Factory employment reached its highest reading since January 2025, and inventories returned to expansion for the first time in 13 months, signaling that manufacturers are rebuilding stock rather than drawing it down.

Electronics demand continues to run hot. Global semiconductor sales reached $110.5 billion in April, up 93.9% y/y, and the Semiconductor Industry Association now projects annual chip sales will top $1.5 trillion in 2026 after a $791.7 billion 2025. March sales rose 108.5% y/y in Asia Pacific, 83.1% in the Americas, 74.8% in China, and 46.5% in Europe. AI data center buildouts across Taiwan, South Korea, and Singapore are driving demand throughout the supply chain, including for substrates, high-layer-count boards, and advanced packaging.

Across Asia, the same split between AI-exposed and consumer-exposed production is visible in the China data. China’s official manufacturing PMI edged up to 50.3 in June, but high-tech equipment manufacturing ran well ahead of the broader factory sector at 53.5, while consumer goods production lagged at 50.2, and factory-gate prices continued to fall, squeezing producer margins. Chinese exports to the U.S. plunged 34.5% y/y in May as shipments were rerouted toward Southeast Asia and the European Union, and the U.S.-China tariff truce is set to expire in mid-August, a date worth circling. Chinese exports should grow this year, driven by AI investment, renewable energy equipment, and EVs, even as bilateral channels narrow.

Europe’s economy is expanding, but barely. The Eurozone manufacturing PMI slipped to 51.4 in June, a fourth consecutive month above 50 but a four-month low, with Germany just holding expansion at 50.3 and export orders declining for a second straight month. Supply chain disruption tied to the Strait of Hormuz remains the region’s binding constraint, with supplier delivery times near their worst since 2022, though input cost inflation eased to its slowest pace since the war began. Europe’s recovery remains very fragile and is relying on inventory build-up more than underlying demand.

In the U.S., the cost picture improved in June but remains the central constraint. The ISM Prices Index fell 9.1 points to 73.0, the largest single-month decline since July 2022, though input prices remain well above pre-war levels, with 15 of 18 industries still reporting higher costs. Headline CPI ran 4.2% y/y in May, with energy up 23.5% over 12 months, while core CPI held at a calmer 2.9% and core goods prices actually declined on the month, indicating muted tariff pass-through to consumers so far. The Federal Reserve held the federal funds rate at 3.50% to 3.75% in June, removed a previously projected cut, and signaled the possibility of a hike. Firms should plan capital spending around current financing costs persisting through year-end.

The backdrop for electronics manufacturing looks solid. First quarter U.S. GDP was revised up to a 2.1% annualized pace, demand indicators across the sector continue to expand, and every major region is growing, even if unevenly. But there are several risks worth watching, including energy pass-through, the mid-August tariff deadline, an extended period of restrictive rates, and softening export demand in both the U.S. and Europe. None of these appears positioned to interrupt the expansion over the next year, but all are risks to continued expansion. The more likely story is a widening global spread between AI-exposed segments running at capacity and consumer-exposed segments navigating higher costs.

May North American Book-to-Bill Analysis

By Mike Carano, Technical Consultant and Mark Wolfe, Executive EMS Advisor

PCBs Steady as Orders Climb

EDITOR’S NOTE — THE BOOK-TO-BILL RATIO

The book-to-bill ratio compares the value of new orders a segment books against the value of product it bills (ships) over the same period. A reading above 1.0 means orders are coming in faster than product is going out, a sign of growing demand and building backlog. A reading below 1.0 means shipments are outpacing new orders. Because the figure is calculated on a rolling basis, a single month can move for mechanical reasons. For instance, a shipment delayed by a parts shortage lowers billings while the order stays on the books, nudging the ratio up without any true change in demand. The direction over several months is what tells the story.

No major changes in gradual momentum

There is no dramatic shift in the PCB data since last month; the underlying momentum is simply continuing at about the same intensity. Rigid PCB shipments are up roughly 12%, and cumulative bookings are up around 22% on the year, with the monthly cadence stepping up as the second quarter runs meaningfully ahead of the first. Any two data points don’t make a trend, but the direction since the start of the year is clearly upward, and it lines up with what fabricators are describing on the ground.

“EMS book-to-bill has now held above parity for nine consecutive months. The monthly numbers are choppy, but the direction is steady, shipments are growing, and the industry continues to benefit from broader investment in the tech sector.”
— Dr. Shawn DuBravac, Chief Economist, Global Electronics Association

Longer lead times reflect both real demand and capacity constraints

Lead times are extending, and it’s worth being precise about why. Part of it is supply-chain friction on raw materials, but the larger driver is simply that orders have increased, and shops are running into capacity limits. Production is happening, but there are only 24 hours a day. Fabricators are adding overtime to work it off, and some reports turn work away because they have more than they can handle. That distinction matters for reading the numbers: extending lead times inflate bookings mechanically, so the accelerating book-to-bill is partly a lead-time effect and partly genuine incremental demand.

“I don’t see over-ordering. The Commerce Department data shows electronic-equipment inventories are shrinking, which means they have to be replenished. This is real demand, not speculation.”
— Mike Carano, Executive PCB Advisor, Global Electronics Association

This looks like real demand, not inventory hoarding

An important thing this month is what is not happening: there is no evidence of the double ordering that has distorted past cycles. Independent signals point to shrinking electronic-equipment inventories that now need replenishing, and the industry doesn’t appear to perceive constraints as severe enough to risk another inventory hangover, a risk that is especially acute for custom PCBs, where over-ordering means taking on boards that can’t easily be repurposed. In short, the booking strength reads as real, not speculative.

Defense, servers, and a wave of prototyping

The demand picture is led by a few clear threads. Defense is replenishing munitions and related hardware in the wake of the recent Middle East conflict; a dynamic multiple fabricators have flagged. Servers are the other engine: the market is running hot, with major server makers for all populating and ordering boards, and higher-layer-count server work increasingly sourced domestically. There is also a notable surge in semiconductor-side prototyping and test boards, with at least one program testing dozens of different board designs at once before down-selecting, which seeds follow-on production and spares once a design is chosen.

Why the server work is landing in North America

A structural note behind the domestic strength: when a customer needs high-end, high-layer-count server boards quickly and wants to avoid shipping delays and tariffs, they increasingly have them made here. Domestic fabricators will step up to build the 20-, 30-, and 40-layer boards well and on time, so the less cost-sensitive, higher-complexity work continues to flow to North American shops.

PCB remains a lagging indicator

One framing worth keeping in front of readers: PCBs lag the broader electronics cycle. When end demand strengthens, the question is often why we aren’t seeing it yet on the PCB side, and the answer is that the orders and inventory replenishment arrive a beat later. Read that way, the current acceleration is consistent with strength that showed up upstream earlier in the year now working its way into board orders. Read the full May PCB Book-to-Bill news release here.

EMS Holds the Line

A second straight strong reading, without the drama

The three-month rolling EMS ratio came in at 1.36 this month, easing marginally from 1.39 the prior month. Together, those are the two highest readings of the past year, which points to real, ongoing growth in demand. Shipments were slightly down in May while the order book firmed, so the strength is showing up more in bookings than in billings for now. Year-to-date remains up, but nothing in this set of data is moving dramatically.

Orders are trickling in and the tone is cautious optimism, not exuberance

EMS companies describe orders trickling in rather than the floodgates opening, a measured, steady improvement. The cautious optimism framing from prior months still applies, and the true-demand read holds: this looks like genuine order flow rather than stock drawdown or speculative building. Sentiment among the participant base, which skews toward military, aviation, and space, remains firm, and may run a touch hotter than the broad market for that reason.

“There’s some cautious optimism that orders are starting to fill in—this idea of being at a true demand level applies. But it’s trickling in, and not opening floodgates.”
— Mark Wolfe, Executive EMS Advisor, Global Electronics Association

Steadier than PCB, with lead times a smaller factor

Compared with PCB, the EMS side looks more like a steady state. Assemblers aren’t extending lead times or renegotiating with customers to the same degree, though they are undoubtedly getting permission to order circuit boards earlier where board lead times have stretched. It’s also worth noting a mechanical quirk: if an assembler misses shipments because it’s constrained on parts (PCBs or otherwise), billings fall while bookings rise, which can nudge the book-to-bill ratio upward without any real change in demand. The month-to-month moves here are small enough that they shouldn’t be over-read.

When there’s little new, describing what’s not happening is still useful

There is no meaningful new structural development on the EMS side in the past few weeks. Supply-chain constraints haven’t clearly worsened or eased, and demand isn’t going wild. That steadiness is worth communicating plainly: reporting that the market is holding its footing, with no sign of the double-ordering or inventory distortions that colored earlier cycles, helps dispel concerns that the industry is repeating past mistakes. Sometimes the most useful update is that there is no fire to put out.

Read the full EMS May Book-to-Bill news release here.

One Supply Chain, Same Direction

Both readings are strong, and moving in the same direction

PCB continues to run higher than EMS, but both are well up. EMS held near its recent highs, easing only slightly to 1.36 from 1.39, while rigid PCB bookings are accelerating (cumulative bookings up around 22%, shipments up around 12%). The upward trend since the start of the year is intact on both sides, even if any single month is noisy. One reminder on reading them together: PCB tends to lag the broader cycle, so its acceleration reflects demand that showed up upstream earlier, and the two North American series move together directionally without lining up one-for-one.

This is real demand, and importantly, not a repeat of past cycles

The strongest cross-sector signal is what isn’t happening: there’s no evidence of double-ordering or speculative inventory building. Electronic-equipment inventories are shrinking and need replenishing, and neither PCB nor EMS participants appear willing to risk another inventory hangover, a discipline reinforced on the PCB side by the custom, hard-to-repurpose nature of the product. Demand is broad, led by defense (munitions replenishment) and servers, with a wave of semiconductor prototyping seeding future production.

Lead times and constraints are shaping the numbers on both sides

Rising bookings partly reflect longer lead times rather than pure demand growth. Extending queues inflate the ratio mechanically, and part-supply constraints can do the same on the EMS side by trimming billings. But a genuine portion is incremental demand meeting real capacity limits: PCB shops are adding overtime and turning work away. The shared takeaway is that the market is genuinely healthy and steady, and this month’s honest message is that the trend is continuing without a new twist.

Earnings & Market Reports

Global Semiconductor Sales Jump 94% Year Over Year in April

Global semiconductor sales reached $110.5 billion in April, up 11% from March and 93.9% from the same month last year, according to the Semiconductor Industry Association.

The April increase marked the 14th consecutive month of sequential growth for the global semiconductor market. Monthly sales figures are compiled by World Semiconductor Trade Statistics and are based on a three-month moving average.

SIA also endorsed the latest WSTS forecast, which projects global semiconductor sales will rise 90% to $1.5 trillion in 2026, reaching that level earlier than previously expected. Industry sales are forecast to exceed $1.9 trillion in 2027.

SIA said growth continues to be driven by demand for artificial intelligence infrastructure and accelerated computing platforms. Regional year-over-year gains were strongest in the Americas, where sales rose 115.8%, followed by Asia Pacific/All Other at 114.9% and China at 78.6%. Europe increased 54.7%, while Japan rose 15.6%.

The strong April data reinforce the importance of AI infrastructure demand as a driver for the semiconductor market and, by extension, for electronics manufacturing, PCB, test, packaging and supply-chain activity.

Global Semiconductor Equipment Billings Rise 14% in First Quarter

Global semiconductor equipment billings reached a record $36.5 billion in the first quarter, up 14% from the same period last year and 1% sequentially, according to SEMI’s Worldwide Semiconductor Equipment Market Statistics report.

SEMI attributed the growth to continued investment in artificial intelligence-related semiconductor manufacturing, including capacity expansions and technology upgrades supporting leading-edge logic, DRAM and advanced packaging production.

The strong first-quarter result reflects ongoing investment in the manufacturing infrastructure needed to support AI-driven semiconductor demand. It also highlights continued momentum in advanced packaging and leading-edge chip production, both of which are becoming increasingly important to electronics manufacturing supply chains. For EMS and electronics manufacturing providers, the trend is important because semiconductor equipment spending often points to future capacity, technology transitions and downstream manufacturing demand. Continued investment in AI-related semiconductor capacity could support demand for PCB, assembly, test, packaging, power, thermal and high-complexity manufacturing capabilities.

Jabil, Inc. (NYSE: JBL)

Jabil reported a strong third quarter of fiscal 2026, with revenue of approximately $8.8 billion, up 12% year over year and $250 million above the midpoint of its prior outlook. GAAP operating income was $445 million, or 5.1% of revenue, while core operating income was $504 million with a core operating margin of 5.8%. GAAP diluted EPS was $2.59, and core diluted EPS was $3.16, up 24% year over year.

Results benefited from continued strength in AI infrastructure, stronger-than-expected automotive and transportation demand, and improved performance in connected devices. Management emphasized that revenue, margins, EPS, and free cash flow all exceeded expectations, suggesting that growth was not driven by a single end market but reflected broad-based execution across the portfolio.

Regulated Industries revenue was $3.2 billion, up 4% year over year, driven mainly by Automotive & Transportation. Core operating margin was 5.6%, up 10 basis points from the prior year. While automotive industry headlines have generally focused on slowing EV demand and tariff uncertainty, management described conditions as improving relative to earlier expectations. Stronger exports from China, industry consolidation, and increasing adoption of powertrain-agnostic vehicle platforms are helping support demand. However, management repeatedly cautioned that automotive remains volatile and visibility is still limited.

Intelligent Infrastructure remained Jabil’s primary growth driver. Revenue increased 21% year over year to $4.2 billion, supported by growth across capital equipment, cloud and data center infrastructure, and networking and communications. Networking and communications revenue rose more than 50%, aided by a networking ramp in India. Core operating margin improved 80 basis points to 6.1%.

The most important trend discussed on the earnings call was the continued expansion of AI infrastructure spending. Jabil raised its fiscal 2026 AI-related revenue outlook to approximately $13.6 billion from $13.1 billion previously and $9 billion in fiscal 2025. The revised forecast implies roughly 50% year-over-year growth. Management cited demand across compute, storage, networking, optics, power, cooling, and rack-level integration, and noted the addition of a third hyperscale customer during the quarter.

Importantly, management suggested that AI spending is broadening beyond GPUs and servers. Customers increasingly want integrated rack-level solutions that combine compute, networking, power distribution, cooling, and thermal management. This trend plays directly into Jabil’s manufacturing and systems-integration capabilities and could support higher-value content per deployment over time. Management also indicated that AI-related growth is becoming more diversified across customers and product categories, reducing dependence on any single platform.

Connected Living and Digital Commerce revenue was $1.4 billion, up 5% year over year and above expectations, driven by stronger consumer-related demand. Core operating margin was 4.9%. While this segment is not currently the primary growth engine, the better-than-expected performance suggests consumer demand may be stabilizing after a prolonged period of weakness.

For the fourth quarter of fiscal 2026, Jabil expects revenue of $9.2 billion to $10.0 billion, representing approximately 16% year-over-year growth at the midpoint. Core operating income is projected at $589 million to $649 million, with a core operating margin of about 6.4% at the midpoint. Core diluted EPS is expected to be $3.80 to $4.20.

For fiscal 2026, Jabil raised its revenue outlook to approximately $35 billion from $34 billion previously, implying about 17% growth year over year. The company expects core operating margin of approximately 5.8%, core EPS of about $12.70, and adjusted free cash flow of more than $1.4 billion.

Looking ahead, management expects AI-related revenue growth in fiscal 2027 to remain strong and indicated that percentage growth could be similar to fiscal 2026 despite the much larger revenue base. This is a notable signal because it implies confidence that AI infrastructure spending remains in the early stages rather than nearing a peak. Management also believes AI expansion, improving business mix, and free cash flow discipline can lift core operating margin above 6%, a level that would represent a meaningful step-up from historical profitability.

One of the more interesting disclosures from the earnings call—not something that would be fully apparent from the press release alone—was management’s discussion of the evolving AI supply chain. Executives highlighted growing customer interest in complete AI infrastructure stacks rather than individual components.

This suggests Jabil is positioning itself not merely as a contract manufacturer but increasingly as a strategic manufacturing and integration partner for hyperscale AI deployments.

Another notable takeaway came from the analyst questions: the concentration of questions around AI indicates that investors increasingly view Jabil as an AI infrastructure beneficiary rather than a traditional electronics manufacturing services company.

Overall, the key message from the earnings call was that Jabil’s growth story is increasingly tied to AI infrastructure. While automotive recovery and consumer stabilization provided incremental support during the quarter, management’s confidence in sustained AI demand, expanding hyperscale relationships, increasing rack-level integration opportunities, and the potential for margins to exceed 6% in fiscal 2027 were the most significant strategic takeaways from the discussion.

Flex Ltd. (NASDAQ: FLEX)

Flex reported a strong fourth quarter of fiscal 2026, with revenue of $7.5 billion, up 17% year over year. Adjusted gross margin reached a record 9.9%, up 50 basis points, while adjusted operating margin also reached a company record of 6.7%, up 50 basis points from the prior year. Adjusted EPS increased 27% year over year to $0.93.

For the full fiscal year, Flex revenue was $27.9 billion, up 8%, driven by continued growth in Cloud, Power and Industrial, partly offset by softness in consumer-related end markets. Adjusted operating income increased 21% to $1.8 billion, while adjusted operating margin rose 70 basis points to 6.3%. Full-year adjusted EPS increased 25% to $3.30, and free cash flow was approximately $1.1 billion.

The most important development was Flex’s planned spin-off of its Cloud and Power Infrastructure segment into a separate public company, expected to be completed in the first quarter of calendar 2027. The segment combines Flex’s data center, cloud, cooling and power businesses and is positioned around AI data-center infrastructure, power distribution, thermal management and rack-scale integration.

Cloud and Power Infrastructure revenue was $1.8 billion in the quarter, up 31% year over year. For the full year, segment revenue was $6.6 billion, up 38%, exceeding Flex’s target of 35%. Segment operating margin was 9.2% for the year, down 100 basis points because of infrastructure investment and cloud ramp costs. Management expects to recover that margin pressure in fiscal 2027 and expand margins further in fiscal 2028 as the business grows into those investments.

Flex expects fiscal 2027 revenue of $32.3 billion to $33.8 billion, up 18% at the midpoint, with adjusted operating margin of 7.0% to 7.1%. The company expects Cloud and Power Infrastructure revenue to rise 65% to 75% in fiscal 2027 and more than 80% in fiscal 2028. Management said recent wins include a multiyear contract with Google and additional business with hyperscalers, colocation providers, neoclouds and utilities.

Analysts focused on the planned spin-off, which will be named Nextracker Infrastructure Solutions, customer concentration, Google-related growth, margins and the durability of AI infrastructure demand. Management said growth is diversified across compute, cooling and power infrastructure rather than tied to any single customer or product.

A key takeaway is that Flex sees AI infrastructure shifting from individual product manufacturing toward complete architecture solutions. Customers increasingly want systems that arrive fully assembled, fully tested and ready for deployment in data centers. Management described this ability to integrate power, cooling and compute at scale as a major competitive moat. That suggests Flex is moving from traditional EMS execution toward higher-value infrastructure integration for AI and mission-critical power applications.

M&A and Investment News

TTM Technologies, Inc. to Acquire Privately-Held, European-Based Swiss Technology Group AG and ILFA GmbH

TTM Technologies, announced the intent to acquire, subject to regulatory approvals, two well established companies in Europe: privately-held Swiss Technology Group AG (“STG”), headquartered in Zurich, Switzerland, and privately-held ILFA GmbH (“ILFA”), headquartered in Hannover, Germany, in separate transactions for all-cash consideration.

STG, through its underlying businesses, has a long history of interconnect solution leadership in Europe and was created through the merger of GS Swiss and the Hofstetter Group in 2023. The Company is a natural addition to TTM with its focus on miniaturized and small form-factor technology applications, primarily for the Medical end market but also with highly relevant technology for other markets of strategic importance such as Aerospace & Defense. STG produces rigid, rigid-flex, and flex printed circuit board (“PCB”) solutions as well as manufacturing and coating capabilities for miniaturized microcircuits. STG operates facilities in both Switzerland and Germany and boasts a global customer base that includes leading manufacturers in surgical robotics, hearing aids, medical imaging and implantable solutions.

ILFA has a 45-year legacy as a German provider of complex PCB solutions spanning Aerospace & Defense, Industrial, and Medical technology markets. Like STG, ILFA brings manufacturing of rigid, flexible, or rigid-flex PCBs, and also adds CAD services to enhance prototyping and production for various PCB designs. ILFA also possesses multiple strategically valuable certifications for electro-optical PCBs, processes for embedding components, and the integration of fluid channels.

“Consistent with our updated long-term strategy, these smaller but meaningful acquisitions establish our initial footprint in the important European market, adding healthy “long-cycle” businesses with strategic technology capabilities to the TTM portfolio, reinforcing our “up the chain” value-add technology approach,” said Edwin Roks, President and Chief Executive Officer of TTM Technologies. “The acquisitions of Swiss Technology Group AG and ILFA demonstrate TTM’s strategic commitment to diversification through both product and geographic means, expand our technology solution capabilities and also build on our legacy applications.” Dr. Roks added.

Citi is serving as the exclusive financial advisor to TTM for the potential acquisition of STG and Piper Sandler & Co. is serving as financial advisor to STG. The combined acquisitions are expected to be immediately, albeit modestly, accretive when completed following regulatory approvals and excluding purchase accounting adjustments and similar factors. It is expected that these transactions will close in the third quarter of 2026. TTM expects to provide additional insight for investors during its formal second quarter earnings call that is currently projected for early August.

TTM Technologies Opens Ultra-HDI PCB facility in Syracuse

TTM Technologies has opened a new Ultra-HDI printed circuit board manufacturing facility in Syracuse, New York, in the United States. The USD 130 million investment – including USD 30 million from the US Department of War – is set to create up to 400 new jobs and bring TTM’s total workforce in the region to approximately 1,000.

The 215,000 square-foot facility sits on TTM’s existing Syracuse campus and is among the first in the US purpose-built for Ultra-HDI PCB and advanced packaging production for aerospace and defence, according to a press release from the company. Ultra-HDI boards enable greater miniaturisation and performance density than conventional PCBs — and until now, domestic US production capacity for the technology has been severely limited, with the majority of global manufacturing concentrated in Asia.

The Syracuse opening comes days after TTM announced its entry into the European market through the planned acquisitions of Swiss Technology Group in Zürich, Switzerland, and ILFA in Hannover, Germany – two established PCB manufacturers serving medical, aerospace, and defence customers, as Evertiq reported. The two moves together suggest a company actively expanding its geographic footprint and technology capabilities in parallel.

Celestica Expands in Texas with $300 million Investment

Canadian EMS provider Celestica is expanding its campus in Richardson, Texas, in the United States, to approximately one million square feet. The USD 300 million investment over the next two years is expected to create nearly 2,300 new jobs and retain around 400 existing positions.

The expansion involves renewing leases on two existing buildings and signing a new lease on a 343,000 square-foot building currently under construction at 2801 Telecom Parkway, with occupancy running through 2036. The capital will go toward tenant improvements and new equipment across the campus, according to a press release from the City of Richardson.

Celestica relocated to Richardson in 2022. The City of Richardson has approved a USD 3 million tenant improvement grant tied to Celestica’s commitments on occupancy, capital investment, and job creation.

Flex to Spin Off AI Infrastructure Business

Flex has announced plans to spin off its cloud and power infrastructure segment into a standalone public company focused on AI data-center infrastructure, power management and thermal technologies.

The new company, referred to as SpinCo, will focus on digital and electrical infrastructure systems for AI and mission-critical applications. Flex will continue as an advanced manufacturing provider serving healthcare, automotive, industrial, communications and lifestyle markets.

The transaction is intended to be tax-free to shareholders and is expected to close during the first quarter of calendar 2027. Revathi Advaithi will become CEO of SpinCo and remain chairman of Flex during a transition period, while Michael Hartung will become CEO of Flex.

Flex said SpinCo is positioned to benefit from rising AI adoption, increasing power density, electrification and growing infrastructure complexity. The company is targeting approximately 65% to 75% revenue growth for SpinCo in fiscal 2027, accelerating to more than 80% in fiscal 2028.

Following the separation, Flex will continue operating more than 75 manufacturing and logistics facilities across 30 countries, with a focus on advanced manufacturing, supply-chain solutions and automation-enabled production.

Flex is separating a high-growth infrastructure business while keeping the remaining company focused on diversified manufacturing, supply chain and industrial technology markets.

Adani and Jabil Target AI Data Center Infrastructure Platform in India

Adani Enterprises and Jabil Inc. have announced their intent to form a strategic alliance to establish an AI and data center infrastructure manufacturing platform in India.

According to Business Wire, the proposed alliance would combine Adani Group’s infrastructure, green energy, logistics and data center footprint with Jabil’s engineering, supply-chain and advanced manufacturing capabilities. The companies said the platform is intended to support local and global demand for AI-ready data center hardware.

The proposed manufacturing platform is expected to focus on high-density AI racks, servers, storage systems, networking equipment and liquid-cooled infrastructure. The alliance also targets broader data center infrastructure hardware, including power distribution units, coolant distribution units, transformers, switchgear, bus bars and thermal management systems.

The companies said the platform could support multi-gigawatt AI rack manufacturing capacity in India and serve hyperscalers, colocation providers and enterprise data center customers. They also said the initiative addresses a global AI infrastructure opportunity estimated at more than $3 trillion over the next seven years. Adani and Jabil are currently working on definitive operational frameworks and formal documentation for the proposed alliance.

The announcement comes as India’s data center market continues to expand, supported by AI demand, cloud adoption, data localization requirements and planned hyperscaler investment. The companies cited forecasts that India’s data center capacity could reach 5 GW to 8 GW by 2030. Adani Group has also committed to developing 5 GW of green-energy-powered, AI-ready hyperscale data centers by 2035.

Jabil brings relevant experience in AI data center infrastructure manufacturing, including rack-level integration, power management and thermal systems. The company has also expanded its capabilities through infrastructure investments and acquisitions such as Hanley Energy Group and Mikros Technologies.

The announcement also reinforces India’s emerging role as a potential manufacturing hub for AI infrastructure hardware. If executed, the alliance could strengthen India’s position in high-value electronics manufacturing and support exports of AI-related hardware to global data center markets.

The key caveat is that the companies have announced an intent to form a strategic alliance, not a completed manufacturing operation. The timing, final structure, investment levels and production ramp remain subject to definitive documentation and execution.

Praesidian Capital Exits Investment in Green Circuits

Praesidian Capital has realized and exited its investment in Green Circuits in connection with the sale of the electronics manufacturing services provider.

Praesidian had provided capital to support Evolve Capital’s acquisition of Green Circuits in 2018. Based in San Jose, CA, Green Circuits provides quick-turn printed circuit board assembly and electronics manufacturing services for customers in aerospace and defense, medical, industrial and other markets.

Praesidian said it was pleased to have supported Green Circuits’ growth during the investment period. Evolve Capital also credited Praesidian’s support as a contributor to the company’s development and successful outcome. Financial terms of the transaction were not disclosed.

The transaction is relevant to the EMS market because it reflects continued investor and buyer interest in specialized electronics manufacturing assets, particularly companies serving high-reliability end markets such as aerospace and defense, medical and industrial electronics.

Scanfil Signs $28 Million Industrial Automation Manufacturing Agreement

Scanfil has signed a manufacturing agreement with a leading industrial automation company that is part of a global technology group, expanding its position in industrial automation and electronics manufacturing applications.

The initial scope of the agreement represents approximately €25 million, or $28.1 million, in business volume. Scanfil said its global production network will support the customer’s manufacturing, supply-chain and sustainability requirements.

The company said the partnership could expand further over the next three years, depending on the customer’s production ramp plans and future project development.

Lars Skanke, Scanfil’s sales and account management director for energy and cleantech, said the agreement reflects the company’s electronics manufacturing capabilities and supports its strategy of growing with global customers through its international manufacturing footprint.

The agreement strengthens Scanfil’s position in the Energy & Cleantech sector and supports long-term growth opportunities in Europe and Asia.

Renesas Acquires Pictorus to Expand Embedded System Design Platform

Renesas Electronics has completed the acquisition of Pictorus, an Oakland, CA-based software developer, in a move intended to accelerate embedded system development and strengthen Renesas’ cloud-based design capabilities.

According to Evertiq, the acquisition gives Renesas access to Pictorus’ behavioral modeling platform, which is designed to help engineers visually design, simulate and validate embedded system behavior. The technology moves system development beyond individual point tools by supporting a more connected model-based design workflow.

Renesas said the acquisition will enhance Renesas 365, its recently introduced platform for electronics system development. The platform is intended to unify the development process from discovery and design through lifecycle management. By adding Pictorus’ technology, Renesas aims to support digital continuity from system modeling to software implementation and device deployment.

The company said the added capabilities will allow engineers to create virtual prototypes earlier in the development cycle, generate code more quickly and evaluate device choices more efficiently. This could help shorten development timelines for embedded applications, particularly as hardware and software design become more closely integrated.

Pictorus’ platform supports rapid iteration, memory-safe code generation and model-based design, making it easier for engineers to design, debug and deploy embedded software.

As embedded products become more complex, suppliers are trying to capture more of the engineering workflow, not just the component sale.

Manufacturing Market Insider

Ready for more?