Smartflex Explains Slowdown in Sales

TUSTIN — Smartflex Systems Inc. said that orders from two major customers have slowed, prompting a brokerage to lower its recommendation on the company’s stock to “buy” from “strong buy.”

Smartflex, a flexible chip maker, acknowledged that earnings will be slightly lower than expected. “We’re not at record levels, but we’re at strong levels and we’re making money,” said William Healey, the Tustin company’s chief executive.

The Maxtor unit of Hyundai Electronics Industry Co. and the Iomega Corp., both of which make disk drives, have slowed their supply chains. Maxtor is losing money and making adjustments to its product line, and Iomega has soft foreign sales and needs to sell its built-up inventory before gearing up again, Healey said.

“Electronics in general is experiencing a softness through the summer,” he said.