In Europe, Elcoteq teeters on bankruptcy. Three of its subsidiaries have already declared, and the corporate parent has seen its access to cash all but dry up.

In Asia, a smaller but still significant restructuring also is taking place, with the outcome just as uncertain. SMT Holdings, ranked 45th in last year’s CIRCUITS ASSEMBLY Top 50, missed a debt repayment in March, and is negotiating with its 11 top lenders to stave off a takeover. While 10 of the 11 have signed on, it’s a slippery slope: falling revenues and massive losses can be explained away in a down market. But the EMS sector has been in recovery mode and the hemorrhaging at SMT Holdings continues. An independent auditor, Deloitte & Touch, this week acknowledged SMT is working on a restructuring plan, but said the assumptions were so great that it couldn’t even issue an opinion on the EMS company’s chances as a “going concern.” Its report is basically accountant speak for, “We don’t like what we see.”

Echoes of Elcoteq abound. Customers can’t risk product delays because their EMS provider is out of cash, and tend to bolt at the first opportunity. Competitors smell blood in the water. The situation snowballs. As of this writing, the prognosis for SMT Holdings is grim.