Commentary: Why Singapore Is Unloading An Icon

Just a couple of years ago, NatSteel Electronics Ltd. was an exemplary Asian success story. Under the guidance of Chester Lin, an imaginative CEO who is anything but risk-averse, the Singapore contract manufacturer did brilliantly at assembling name-brand computers for high-class clients that no longer wanted to run their own factories. NatSteel Electronics was paid in hard currency and boasted such rapid profit growth that it managed to weather the Asian crisis.

But NatSteel Electronics has become a parable of how difficult it is for Asian players to compete against outsize global corporations in the fast-growing contract manufacturing business. Quick though it was to latch on to industry trends and identify best-selling products, NatSteel Electronics fell behind its U.S.-based competitors, which have deeper pockets, are geographically closer to their clients, and are better at cutting costs.