Filed by C-MAC Industries, Inc.
Pursuant to Rule 425 of the Securities Act of 1933
Subject Company: Solectron Corp.
Commission File No. 001-11098

SOLECTRON CORP.

Moderator: Susan Wang
August 9, 2001
5:30 a.m. PST

Joining me today to discuss the transaction are Koichi Nishimura, Solectron's chairman [audio break]-- excuse me-- is there an echo? I'm hearing an echo. Operator?

On this call, we will recap the transaction, discuss how C-MAC fits with our continuing customer focus strategy, and provide to you the C-MAC perspective. We will also discuss our updated guidance and take your questions, with a plan to conclude no later than 9:45 a.m. Eastern time. I apologize for the abrupt cutoff, but we do have a very tight schedule to keep, and I appreciate all of your support.

Let me now first remind you that during the course of this conference call, we may make projections or other forward-looking statements about the expectations, beliefs, plans, intentions, and strategies of Solectron and C-MAC. Our ability to achieve planned business objectives involves many risks and uncertainties. Forward-looking statements relating to expectations about future events or results are based upon information available to the company as of today's date. We assume no obligation to update any of these statements, and these statements are not guarantees of Solectron or C-MAC.

The financial results and product development of Solectron and C-MAC could differ materially from current expectations. Factors that may affect the ability to achieve planned business objectives include but are not limited to the following: one, the company's revenues and earnings are subject to a number of factors that make estimating operating results extremely uncertain; two, competition for the company's products is intense; three, the uncertainties of whether new products, product extensions, or product strategies will be successful; four, risks associated with this acquisition including a, conditions in the financial markets relevant to the proposed transaction; b, the failure to achieve expected synergies and efficiencies of operations; c, risk of price fluctuations; d, loss of major customers; e, the ability to manage business integration; f, risks associated with international sales; and, g, operations and environmental regulations; five, loss of key personnel; six, litigation including litigation over intellectual property rights; and, seven, general technological and economic factors.

The risks associated with Solectron's business are discussed in Solectron's annual report on Form 10K for the year ended August 25, 2000, and in subsequent quarterly reports on Form 10Q. The risks associated with C-MAC's business are discussed in C-MAC's annual report on Form 40S for the year ended December 31, 2000, and in subsequent quarterly reports on Form 6K. You are encouraged to read this information carefully.

We caution you that such statements reflect only our current expectations and that actual events or results may differ materially. We refer you to the risk factors and cautionary language contained in the documents that the companies file from time to time with the Securities and Exchange Commission, specifically recent filings on Form 10K, 10Q, 8K, S3, S4, and 40F as well as today's news release. Such documents contain and identify important factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements. We undertake no obligation to update those projections or forward-looking statements in the future.

As I mentioned this morning, we issued the news release announcing the transaction and on today's call we will refer to the contents of that release.

Solectron, its executive officers and directors, certain other members of management, and employees, may solicit proxies from Solectron stockholders in favor of the business combination and C-MAC, its executive officers and directors, certain of the members of management and employees may solicit proxies from C-MAC stockholders in favor of the business combination.

Information concerning the participants in the solicitation will be set forth in a proxy statement that will be filed with the Securities and Exchange Commission. Information about Solectron's officers and directors is included in Solectron's proxy statement for its 2000 annual meeting of stockholders held January 18, 2001, and filed with the SEC on December 11, 2000. Information about C-MAC officers and directors is included in C-MAC's notice of meeting and management proxy circular for its 2000 annual meeting of stockholders held May 3, 2001, and filed with the Ontario Securities Commission on March 30, 2001. These documents are available free of charge at the SEC's Website at www.sec.gov and from Solectron and C-MAC.

Thank you for sitting through that.

Now let me give you the highlights of our announcement. Today Solectron and C-MAC entered into a definitive agreement pursuant to which C-MAC Industries will merge into a wholly owned subsidiary of Solectron. C-MAC is based in Montreal, and for the 12 months ended June 30, had revenues of 2 billion U.S. dollars. In this all-stock transaction, C-MAC shareholders will elect to receive either 1.755 shares of Solectron common stock or 1.755 shares of a wholly owned Canadian subsidiary of Solectron in exchange for each C-MAC share outstanding.

The total enterprise value of the deal is approximately 2.7 billion U.S. dollars, including the assumption of approximately 30 million dollars in debt, net of cash. This transaction is structured to be tax-deferred for validly electing Canadian residents, C-MAC shareholders, and taxable to U.S. resident C-MAC shareholders. The transaction is subject to approval by the shareholders of Solectron and C-MAC and certain regulatory bodies. We anticipate concluding the transaction by the end of calendar 2001.

A combination of Solectron and C-MAC is expected to yield several compelling benefits. Primary among them is C-MAC's strong presence in high-end systems integration and manufacturing capabilities, which Solectron, too, has been steadily building. C-MAC also provides Solectron with strategic entry into the automotive industry, which both companies have targeted as a growth opportunity.

In addition, Solectron will be able to leverage C-MAC's proven selective vertical integration approach, which results in higher margins through supply chain management and provides make-or-buy flexibility in fulfilling customer orders. C-MAC is a very well-run company and a great cultural fit for Solectron. More fundamentally, this transaction represents another strategic step forward in continuously developing the skills, expertise, and presence required to meet ever-changing customer needs.

In addition, it gives Solectron a greater presence and business investment in Canada in order to provide expanded support services to our Canadian customers.

Now let me turn to Ko for his comments and perspective. Ko?

I am also very excited about the collective actions we are taking to enhance Solectron's position as a leading provider of end-to-end technology, manufacturing, and supply chain solutions. We always have taken the customer focus approach to building our capabilities. Our strategy remains very consistent. As a total supply chain facilitator, we will acquire or build the capabilities necessary to help our customers and our company to succeed.

When we entered in this overall market downturn, we said we would use this time as an opportunity to accelerate key strategic initiatives and take the steps necessary to meet customer needs coming out of this downturn. Implicit in that approach was our anticipation that OEM's needs would change very quickly and accelerate the outsourcing trends. In fact, that is what is happening. We are with them all the way.

It wasn't too long ago that the EMS companies would succeed with a fairly limited scope of capabilities on their circuit board assembly, new product introduction expertise, and some skills in managing the supply chain. At Solectron we've always worked to become an even more valuable partner by expanding those core capabilities and our success at doing that has been the source of our industry leadership over the last decade.

Now, as we have anticipated the downturn is creating the need for OEMs to rely more heavily on the outsourcing model. They need reliable, global, EMS partners with a broad range of skills and expertise. They need partners with the strength to provide true end-to-end technology, one-stop manufacturing and supply chain solution and design to full systems production, product fulfillment, and after-sales service as well as the logistic skills to make it all happen.

Just think of it this way -- in the past, EMS providers would supply various services such as new product introduction, or NPI, in manufacturing. OEMs utilize those services, but they also continue to have direct contact with other parties in fulfillment, component, and materials-- perhaps systems integration and other areas. Today's economy is forcing the OEMs to reduce costs and focus even more tightly on the core competencies, and they can no longer afford, then, to honor resources to have multiple points of contact in the supply chain process. Instead, they look to us to provide that, and we have the ability to deliver what they want and need.

In fact, we are the general contractor of the supply chain for OEM customers. They can and will rely on us to coordinate, conduct a make-or-buy decision and otherwise do the things necessary to design, make, deliver, and service their products, all with the fastest time-to-market and the lowest total cost of ownership. We have been steadily building precisely those capabilities through internal development and through acquisitions including the transaction with C-MAC today.

Today I believe we ought to have the strongest capabilities to meet the OEM needs. In the last two years, we have strengthened relevant capability in several areas including engineering and design, systems integration and assembly, new product introduction, order fulfillment and distribution, and after-sales service. We have also continued to build expertise and a strong customer base in optical services in other important high-technology areas.

We have also entered important new industries -- first, to consumer electronics through our relationship with Sony and now into automotive through C-MAC. In addition, we have strengthened our geographic presence, particularly through NatSteel in Asia, which will be a region of growing importance to us, to our customers, and to their end markets.

In the global services, we have built a very strong, full-service, after-sales presence on five continents, most recently with the addition of Solectron site in Japan and with the European repair hub in Amsterdam. So you can see that we have been deliberately and strategically and systematically building the relevant capabilities, strengths, and presence required to meet the customer needs as a leading and preferred EMS partner.

Now let me discuss the important elements of the C-MAC transaction; first, increased high-end technology capabilities. C-MAC is an industry leader in high-end systems design, manufacturing, and technology with very strong skills that help round out Solectron's complete system solution capabilities, specifically C-MAC has a strong high-end systems integration capability including complex electromechanical design and assembly with strategic backward integration at the metal and backplane fabrication. C-MAC also has the breadth of capabilities in optical networking components application and assembly. Combined with our current capabilities, we will be even more effective at competing for full systems work from customers, as they increase their reliance on EMS partners.

With our combined capabilities, we have a strong competitive edge in the breadth and depth of the full solution service we offer our customers. Secondly, is C-MAC's selective vertical-integration approach. This dynamic make-or-buy approach enables us to capture the benefits of limited components application while retaining the benefits of our highly leveraged cost model. This approach strengthens the performance of internal business units by requiring them to be a competitive, stand-alone business as much as their production is sold to other companies.

On the flip side, in challenging market conditions, we can boost capacity utilization and revenue by pulling more work in-house. Having said that let me note that the fab side represents a modest portion of C-MAC's revenue. They are focused on high-end applications on specific fab capabilities needed to further penetrate specific industry. Thirdly, is revenue and margin opportunities -- we have added additional revenue opportunities by extending existing customer business relationships and developing new relationships. We will also have opportunities to enhance margins by increasing our value-added content and more closely managing the supply chain.

C-MAC's technology-driven manufacturing services provide us with a more robust high-end technology-focused value proposition that allows room for solid margins in the industry we serve. In addition, C-MAC's focus on high-end component engineering carries margin benefits and creates opportunities for further penetration into other important industry.

Fourthly, complemented strength in network and telecom equipment sector -- the new high-end technology design and engineering expertise and, in particular, a full system suite of services and networking and communication will further develop our industry-leading position and offering in those critical sectors. At the end of the day, we are extremely well positioned to capitalize on the upturn and the continued growth in both network, telecom, and telecom equipment industries.

Fifthly, the entry into targeted growth segments -- we have targeted specific new industry segments, and C-MAC brings access to one of those segments, the automotive industry. C-MAC generates about 8 percent of the sales from the automotive industry. It's an attractive industry with end-market growth expected to exceed its recent historical annual growth of 15 percent. It's also a challenging industry to penetrate initially, and C-MAC has established a very solid foothold. Dennis and his team are approaching it in the right way -- building a big support and credibility in key electronic components as a prelude to the future expansion.

Sixthly, enhanced capabilities for the Canadian customers -- with the complementary strength in technology-driven manufacturing services in the network, telecom, and automotive industries, we will be able to provide a wider range of value-added services to our Canadian customers. We will also bring greater resources and geographic benefits to C-MAC and its customers.

In addition to those benefits, C-MAC and Solectron are an excellent cultural fit. In the last several weeks, I've spent a great deal of time with Dennis and his organization. I am impressed with what I've seen from the leadership and from the operation and from the cultural perspective. Cultural fit is among the most important of the criteria for any transaction that we undertake. The good news is that our companies are very compatible.

C-MAC's strategy is highly complementary with our strategy. We are both extremely focused on providing value-added services to our customers, and our decisions are driven by doing the right things to help our customers succeed.

Dennis, on behalf of all of us at Solectron, I look forward to working with you and welcoming your worldwide team.

For the past 15 years C-MAC has evolved from a company having one product, the battery-feed resistor, which was sold to a single customer -- Nortel -- into a global technology design and manufacturing services company with over 500 regular customers. Two hundred-seventy of these customers have a purchase run rate of in excess of a million dollars.

About three years ago we responded to our customers' evolving requirements that included a reduction in their respective supply bases and time-to-pull production, enhanced technologies, design expertise, and aggressive cost reduction programs by creating a selective vertical integration strategy. Our SBI model focuses on the make-versus-buy decision implemented by our global supply chain team. Our strategy differs from vertical OEM strategies of the past in that every one of our plants is a profit center whose goal is to sell a majority of its products to external customers. In this way we constantly benchmark ourselves against industry and have successfully maintained our industry-leading margins.

In challenging economic times such as these, we have had the flexibility to pull in some of our outsource production until such time and conditions improve. In order to maintain our profitability, we've become a global technology design manufacturing services -- a TDMS company -- offering our communications customers total system solutions and, similarly, we have become a full-service supplier to the transportation electronics industry.

We have carefully monitored the competitive landscape and observed our peers engaged in critical capabilities to varying degrees of the past couple of years. They've added capabilities in PCBA fabrication, enclosures, cable harnesses, and systems integration. To effectively compete with the larger OEM divestitures and increase our market share in the future, we recognize the need for additional high-volume PCBA capabilities and scalability.

There were three principal alternatives to broaden our PCBA capability -- C-MAC could buy or build the capacity for the capability or merge. The first two alternatives were less attractive to us, given the time, capital, and resource requirements, in addition to the condition of the available properties. Furthermore, we believe that we would lose the momentum at a time when OEMs are accelerating their outsourcing activities.

After spending a great deal of time with Ko and the Solectron team we are convinced that the combination of the two companies represents the best alternative for our shareholders, employees, and customers, and we're creating the leading TDMS company in the industry.

Ko and Susan have articulated-- I'll try that word again-- articulately described the benefits of the transaction, and I would like to spend a few moments discussing what we perceive the benefits to be to C-MAC's shareholders, customers, and employees.

From our shareholders' perspective, the combination of the two best-in-class companies with complementary capabilities will increase the value proposition to our customers and position us to be the premier TDMS company in the industry, which will bode well for future revenue growth.

Furthermore, our proven selective vertical integration strategy will provide revenue enhancement opportunities from an earnings perspective, and we will be ideally positioned to benefit from the industry upturn. We have been disciplined in our approach, and we have not sacrificed earnings for top-line growth. We will be clearly able to leverage this model with Solectron's customer base and product offering, and we will now have the opportunity to satisfy our existing OEM customers, PCBA and after-market requirements internally. Keep in mind that for each dollar of C-MAC revenue equates to $2 to $3 worth of PCBA revenue and vice-versa.

From a customer perspective, we'll be ideally positioned to offer a complete end-to-end solution from design and technology to full systems integration and order fulfillment to after-market support, and that on a global basis. We are particularly excited about current and future opportunities within the transportation electronics industry. We spent the last five years building the design, electronic, and mechanical capabilities required to become competitive within this industry and have been elevated to the position of a full-service supplier.

Given that the major automotive OEMs are now seeking increased electronic solutions, capabilities that they do not necessarily have in-house, we will have the scalability to take on larger OEM programs. Given that many of these programs require extensive design expertise and engineering capability unique to the automotive industry, we are uniquely positioned to benefit from the accelerated divestiture activity by the OEMs. Similar to our transportation electronics strategy, we have been focused on providing our customers with total solutions within the communications industry.

We will now have the technology and capability to take on larger, complex systems programs and have the manufacturing expertise to produce most of the contents of these systems in-house -- where it makes economic sense to do so, of course. Having internal manufacturing capability allows us to guarantee security of supply for our customers and also gives us the leverage within the supply chain.

With our combined capabilities, we will also reduce our customers' time to full production and overall cost modeling, and from our employees' standpoint, they will share best practices with the Solectron team and will continue to play key roles in our company's future success. They will become part of the premier TDMS company in the industry. The C-MAC team has always responded to their customers' changing requirements with a high degree of integrity, professionalism, and enthusiasm that has ensured our long-term success. The combined company will provide additional career paths and opportunities for the C-MAC team. Together we will build the TDMS company of the future and prepare for the next generation of outsourcing.

Now I would like to turn the presentation back to you, Ko. Thank you.

Now let's turn back to Susan. Susan?

In fiscal year 2002, Solectron plans to generate sales in a range of 16 billion to 18.5 billion U.S. dollars and cash earnings per share of 62 cents to 66 cents. Those ranges are subject to changes in market conditions and are before the C-MAC transaction and other potential acquisitions.

Let's turn now to the fiscal fourth quarter 2001. Consistent with our prior guidance, we expect to generate sales of 3 billion to 3.5 billion dollars and cash EPS of 5 cents to 9 cents -- again, before restructuring charges and one-time charges. As of today, update on nonrecurring items are shaping up as follows: as you already know, the fourth quarter will include 50 million dollars in restructuring charges that we announced on June 18. At that time, we also said we would consider what additional restructuring might be necessary. After analyzing that matter over the last six weeks, we now plan to record an additional fourth quarter restructuring charge of up to about 210 million dollars. Coming in at that level would mean total fourth quarter restructuring charges of about 260 million dollars.

In addition, we expect to incur a one-time nonrecurring charge of about 68 million dollars related to credits and other exposures. While we continue to have general credit loss reserves, a number of smaller accounts are in or at near bankruptcy, and we determined that it is appropriate to build up a specific reserve for such potential unusual losses under these difficult market circumstances.

That concludes our prepared remarks. Operator, please prepare the question-and-answer session. Given the time constraints, we would greatly appreciate if the questions would be limited to one with follow-up if there is sufficient time.

David Parrish with Dain Rauscher Wessels, please proceed with your question.

The greater synergy, on the other hand, is revenue synergy, and the belief is that the time to develop or close on some of these transactions and have a meaningful impact on the results would be a little bit more lengthy. So as a result the current estimate is quite conservative and at the lower end of-- less than half of the 60- to 120-million-dollar range, but it is our belief, as I said, that the revenue synergy is the primary synergy and, over the long term, that is very difficult to quantify because the combination of the capabilities would take us into new realms and significant business rewards that are very, very broad in scope and scale.

Additionally, other customers have similar kinds of requirements expressed to us more and more urgently recently, and we believe that this combined capability again will provide the strength, the depth of capability, and the scale to be responsive to all the other customers' requirements as well.

What the OEMs are looking at in the future is that we will have total order fulfillment. Basically, we will ship directly to their customers, we'll support their after-market, their repair, and what have you, and Solectron has got a superb operation to handle that, and I think they'll-- as we speak today, I think we are certainly in the lead position, and anybody who wants to catch up will have to start chasing us, because we're going to be that further ahead.

The technology solutions business unit of Solectron has technology platforms that are very strong in memory modules, embedded computing systems, board level and system level, input/output devices, and continuing to expand into modular designs on that primarily assembled to order. Typically, we have standard modules that function very effectively, which we customize to fit the OEMs requirements.

We believe that there is, again, not a lot of overlap, and that the products will be complementary to serve a broader range of requirements of our collective customers.

Next time you're on a tarmac, you look at every plane that's on that tarmac. Every one of them has a C-MAC product in it -- pressure sensors, position sensors, bore sensors -- now imagine if we take one of those sensors, put our expertise into it, convince our OEM customers to say let us produce it at a lower cost, take that 8-, 20-, 12-, 50-dollar sensor, move it into a 5,000-dollar system with our embedded computer systems and our operations. So I think it's a great opportunity. It's got to be a win-win situation.

The marketplaces are roughly defined this way -- for build-to-stock, we're looking at things like PCs, notebooks, cell phones, printers, set-top boxes, and some small form-factor devices. Mid-range, we're looking at things like network routers, switches, mid-range service, some medical equipment, storage-type systems, and some level of industrial control products. At the complex end, we're looking at enterprise computing, storage area networks, central office switches, cellular infrastructure and equipment instrumentation and test-type products.

The total market estimated is obviously very large, and it adds up to 900 billion or so. The system content of this business, if you exclude the printed circuit board content, would be a number, and then you would have the printed circuit board content, depending on whether you sell the printed circuit board through as part of the system. So the definition is a bit problematic. So depending on how you define this market, you could add up the system assembly, without PC board, and come up with 500, 600 billion dollars easily.

There are, of course, different ways to approach that. We can do very high-volume, low-end system assembly that can bring in a lot of top line, but it comes with a different set of challenges than the complex high-end arenas that we believe that C-MAC would significantly enhance our ability to pursue. Remember, also, that Solectron has acquired Shinei, which is an enclosure company that would help us with the low-to-mid range system needs.

In this case, with C-MAC, we have capability for large-frame, high-end, that currently addresses the telecommunication and networking markets, but can, in fact, be very helpful to help us with high-end computing and also to help us establish high-end capability in Asia, where we believe, in short- to medium-term, presence in Asia for large-frame assembly would be very relevant.

So when we look at the opportunities and the customers' accelerated demand of the fully integrated supply chain solution, we're looking at opportunities that are very sizable, where the OEM really wants a top-tier partner to be effectively a general contractor to manage the whole supply chain and makes the appropriate decision whether we make it or buy it on their behalf is something that they would be happy for us to handle on their behalf.

So the near-term expectation is the systems business will grow, and I don't know right now whether the high end or the low end is going to grow more rapidly, because these awards come in big chunks, and so from time to time you could have a SKU between the low end and high end. The product mix is typically a situation that we just respond to.

I mean, if you look at our model, and we go all the way from design, all the way from the-- up to the top of the system, as you move up that system, you end up with considerably less-- smaller and smaller and smaller gross margins. So this is why volume is not the total answer and, of course, we, as a new industry at the EMS level, we have been pushed for top-line growth, and it's one of the things that we have kind of stayed away from, rightly or wrongly, but-- and it's worked.

What the goal is, is to have, because of our 40-percent rule, where we try not to buy anymore than 40 percent of our own produced product, in house, because it keeps us best-in-class, gives us the right disciplines, but when times are difficult like they are today, we pull them back in. So in effect, what we try to do, if we were to sell 2.5 billion dollars or 3 billion, only 40 percent of that would be at the systems level.

You need and, Susan correct me if I am wrong, but Solectron shareholder approval is to allow Solectron to issue the number of shares required to do the transaction. So that's really the reason for that approval. In our case, in the case of C-MAC, is to agree to this converger, essentially.

At the present time, we do supply-- I mean, Solectron is one of our top 10 customers, and, hopefully, they'll continue to do business with us.

The maximum number of the 210 is to achieve this 3 billion-dollar to 3.5 billion-dollar sizing. If we see, in the next couple of weeks, that things are not just stabilizing but they, in fact, pick up, we may not trigger the entire event. So we're still indicating to you the plan that we are prepared to deploy if we believe that things are going to stay flat for a bit yet.

At points of the call that were inaudible, we have put a note either stating [inaudible] or [unintelligible] or [background noise] or [audio break] or denoted by a short blank line.

Solectron, C-MAC and their respective directors, executive officers and certain other members of management and employees may be soliciting proxies from Solectron and C-MAC stockholders in favor of combination. Information concerning the participants in the solicitation will be set forth in the proxy statement/prospectus.