The ratings on San Jose, Calif.-based Sanmina-SCI Corp. reflect subpar operating performance, low capacity utilization, and volatile end-market demand, particularly in communications and computing end markets. These concerns partially are offset by the company's top-tier business position, a customer base of leading original equipment manufacturers (OEMs), and longer-term trends favoring electronic manufacturing outsourcing. Sanmina-SCI is a leading provider of electronic manufacturing services (EMS) for the computing, telecommunications, and data communications industries. The company had about $2 billion in lease-adjusted total debt as of September 2004. A severe and prolonged industry downturn, as well as Sanmina-SCI's strategy of retaining considerable manufacturing capacity pending a demand upturn, has caused overall capacity utilization to remain around 60%, well below desired levels and below
