Economic Environment

In this tumultuous and unprecedented economy, a translation of the key levers impacting our economy from a credible source of information is the anchor you need in the storm. Matt Chanoff, TFI Quarterly Forum Chief Economist will be providing a Financial Crisis Monitor to provide the electronics industry a synthesized view of the various federal policies, banking status, fiscal stimulus plans. We are delighted to provide TFI Quarterly Forum members an advance view of this valuable report monthly. You can look forward to the next edition soon.

Electronics

In contrast to the 2001-2002 recession, problems are not centered in the electronics segment. Nevertheless, the value of electronics companies has fallen in line with other segments, and is likely to continue to do so. TFI Quarterly Forum expects TAM growth to be basically flat in 2009, with a slow recovery in 2010. See the most recent Five Year Forecast report for more details.

Outsourcing

TFI Quarterly Forum expects electronics outsourcing to grow at a slight premium to underlying TAM, as OEMs attempt to reduce their asset balances. However, contract manufacturers are not immune from problems facing their customers. In segments that are already very highly outsourced, such as some parts of the telecommunications and computer markets, outsourcing will contract. Also, some segments, such as automotive electronics, will face disorderly contractions and bankruptcies that may have a negative effect on outsourcing. See most recent webinar update on the outsourcing projections for our industry.