Siemens to Outsource Mobile Phone Production

German equipment vendor Siemens AG is to outsource the manufacture of 33 million mobile phones over three years to Singaporean contract equipment maker Flextronics International Ltd., the companies announced Thursday.

Siemens Information and Mobile Communications Group also will increase production capacity at its Kamp-Lintfort, Bocholt and Leipzig plants in Germany, and double capacity at its Shanghai, China, plant to 10 million units a year.

The moves support the group's goal of ranking among the top three mobile phone manufacturers in the world, Siemens said in a statement.

Siemens recently sold to Flextronics a mobile phone factory in Pandrup, Denmark, which it acquired through its takeover of the mobile phone unit of Bosch earlier this year. And last year, Flextronics acquired Siemens server production facility from Fujitsu Siemens in Paderborn, Germany.

Mobile phone manufacturers are turning to contract manufacturers such as Flextronics in a bid to deal with surges in demand.

In May, Motorola Inc. announced a $US30 billion deal with Flextronics to outsource the manufacture of wireless phones, two-way pagers and other communications devices. [See "Motorola, Flextronics in $US30B Strategic Alliance," May 31.] As part of the deal, Motorola took a $US100 million equity stake in the manufacturer.

Mobile phone market leader Nokia in June asked the South Korean manufacturer Telson Electronics to manufacture Nokia designed and branded CDMA handsets for sale in South Korea. .

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