FLEXTRONICS ANNOUNCES FIRST QUARTER RESULTS

Flextronics (NASDAQ: FLEX) today announced results for its first fiscal quarter ended June 30, 2005 as follows:

(1) The non-GAAP financial measures disclosed in this press release exclude certain amounts that are included in the most directly comparable measures under Generally Accepted Accounting Principles (“GAAP”). Non-GAAP results exclude after-tax intangibles amortization, restructuring and other charges, as applicable. The Company recorded intangibles amortization expense of $14.6 million and $8.7 million during the three-month periods ended June 30, 2005 and 2004, respectively. The Company also recorded pre-tax restructuring charges of $32.7 million and $23.6 million during the three-month periods ended June 30, 2005 and 2004, respectively, which were primarily related to the closures and consolidations of various manufacturing facilities. The reconciliation of non-GAAP results to GAAP results is illustrated in Schedule I attached to this press release.

First Quarter 2006 Results

Net sales for the first quarter ended June 30, 2005 were $3.9 billion, which represents an increase of $17 million over the June 2004 quarter.

Excluding intangibles amortization, restructuring and other charges, net income for the first quarter increased 27% to $99.6 million, or $0.17 per diluted share, compared with $78.3 million, or $0.14 per diluted share in the year ago quarter. After-tax amortization, restructuring and other charges amounted to $41 million in the current quarter compared to $4 million in the year ago quarter. As a result, GAAP net income for the first quarter decreased by $15.6 million to $58.7 million, or $0.10 per diluted share, as compared to $74.3 million, or $0.13 per diluted share in the year ago quarter.

Return on Invested Tangible Capital (“ROITC”) increased to 25% in the June 2005 quarter from 18% in the prior year comparable quarter while Return on Invested Capital (“ROIC”) increased to 9% in the June 2005 quarter from 8% in the prior year comparable quarter. The Company’s cash conversion cycle was 20 days in the quarter. Excluding restructuring charges, operating margin increased year-over-year for the seventh consecutive quarter to 3.4%.

The Company ended the quarter with $830 million in cash, an increase of $165 million from June 30, 2004 while total debt has decreased by $217 million over the same period. This represents a net debt reduction of $382 million during the last 12 months.

With regard to the June quarter operating results, Michael E. Marks, Chief Executive of Flextronics stated, “We remain focused on achieving our goal of Return on Invested Capital of 15% through improving profitability, asset utilization and cash flow. To this end, we are pleased that we were able to increase operating margins for the seventh consecutive quarter on a year-over-year basis. This improvement reflects the results of our vertically integrated EMS offering as well as our relentless effort to contain costs in the business. Our world-class working capital management combined with declining capital expenditures should also continue to drive cash flow improvements.”

As previously announced, Flextronics has entered into a definitive agreement to merge its Network Services division with Telavie, a company wholly-owned by Altor 2003 Fund, a Nordic private equity firm. Flextronics will receive an upfront cash payment, deferred and contingent payments, and we will also retain a 30% ownership stake in the merged company. Flextronics has also entered into a separate agreement to sell its semiconductor division to AMIS Holdings, the parent company of AMI Semiconductor. Both divestitures are progressing according to plan and are expected to close during the September 2005 quarter. Flextronics expects to receive cash payments of approximately $550 million in the quarter for these divestitures.

Management plans to disclose the specific impact on the Company’s balance sheet and income statement as a result of these divestitures when they announce financial results for the September 2005 quarter. “We expect to use our available cash to fund growth opportunities in the core EMS business, or redeploy it back into our capital structure. The use of proceeds will be finalized once these divestitures are complete, taking into account prevailing market conditions and a comprehensive analysis of our options to maximize earnings and long-term returns for shareholders,” said Marks.

Guidance

Management provided guidance for quarterly earnings per diluted share (excluding amortization, restructuring and other charges) of $0.18 to $0.21 on revenues of $3.8 billion to $4.2 billion for the September 2005 quarter. Management also reiterated guidance for fiscal year earnings per diluted share (excluding amortization, restructuring and other items) of $0.80 to $0.90 on revenues of $16.4 billion to $17.5 billion for fiscal 2006. The quarterly and fiscal year guidance contemplate the variability in the timing of the divestiture sales and deployment of the proceeds.

Quarterly GAAP earnings per diluted share are expected to be lower than the guidance provided herein by approximately $0.02 to $0.03 per diluted share reflecting quarterly amortization expense. Restructuring and other charges cannot be estimated.

Conference Call and Web Cast

A conference call hosted by Flextronics’ management will be held today at 1:30 p.m. PDT to discuss the Company’s financial results and its outlook. This call will be broadcast via the Internet and may be accessed by logging on to the Company’s website at www.flextronics.com. Additional information in the form of a slide presentation that summarizes the quarterly results may also be found on the Company’s site. A replay of the broadcast will remain available on the Company’s website after the call.

Minimum requirements to listen to the broadcast are Microsoft Windows Media Player software (free download at http://www.microsoft.com/windows/windowsmedia/download/default.asp) and at least a 28.8 Kbps bandwidth connection to the Internet.