SMTC Corp. said it has signed an agreement to provide contract manufacturing services to communications equipment vendor SpiderCloud Wireless in North America, helping to boost sales at the EMS provider.
The sales potential and volume shipment of the transaction was not disclosed and privately-owned SpiderCloud does not disclose its revenue numbers. Aside from the additional revenue SMTC stands to benefit by boosting its credentials as a provider of specialized, low-volume but high margin manufacturing services to OEMs in North America.
Executives at the Canada-based contract manufacturer said the company continues to target communications OEMs with specialized manufacturing offerings and see the SpiderCloud deal as another sign the company’s business model is gaining traction with customers. The positive sales endorsement is showing up also in SMTC’s financials. The company’s sales rose to $296.3 million in 2012, up from $220.4 million in the prior year. However, sales in the first half of 2013 fell from the comparable period of 2012. The SpiderCloud deal could help with the company’s recovery.
"The communications market is a major focus for SMTC, and we're pleased that SpiderCloud Wireless has chosen us as their global manufacturing partner," said Larry Silber Interim president and CEO at SMTC in a statement. "We're committed to supporting the growth we are currently seeing in the wireless communications and networking industries in the San Jose Valley as well as globally, by partnering with innovative leaders like SpiderCloud Wireless. We have bolstered our engineering expertise to support this growth."
Production of SpiderCloud’s small cell enterprise radio access network will take place at SMTC’s San Jose, Calif., facility and could be scaled as needed as the communications equipment OEM expands sales outreach globally, the companies said.
"We chose a proven contract manufacturer with a solid reputation for upholding standards of quality and wireless technology leadership as we deliver our systems to our customers in the global theatre," Behrooz Parsay, senior VP of engineering and operations at SpiderCloud Wireless. "Following an extensive supplier evaluation process, SMTC's comprehensive skill base, Silicon Valley NPI presence, flexibility and willingness to help us succeed, impressed us and helped us choose SMTC."