MILPITAS, Calif. and BRASELTON, Ga., July 29, 1998 - Solectron Corporation (NYSE:SLR), a worldwide provider of lustomized lectronics manufacturing services (EMS) to original equipment anufacturers (OEMs), and Mitsubishi Consumer Electronics America, Inc. (MCEA), a provider of consumer electronics products ranging from wireless devices to top-of-the-line televisions, today announced that MCEA's parent company, Mitsubishi Electric Corporation, and Solectron have signed a letter of intent to form a manufacturing partnership in the wireless telephone market in North America. The planned agreement will include the transfer to Solectron of the wireless telephone manufacturing assets of MCEA's Cellular Mobile Telephone (CMT) division located in Braselton, Ga. Further, to support the new partnership, Mitsubishi Wireless Communications, Inc. (MWCI) of Duluth, Ga. plans to establish a new US design center.

The close of the transaction is expected before the end of the 1998 calendar year. Providing the transaction is completed as planned, Solectron will assume manufacturing responsibility for MCEA-CMT's complete range of branded and private-label cellular products sold within North America. Financial details related to the transaction were not disclosed. Solectron will provide a full-range of manufacturing services including new product introduction (NPI) management, printed circuit board assembly (PCBA) and full systems assembly for MCEA's cellular products for the next five years. As part of the plan, Solectron intends to offer employment to approximately 350 MCEA-CMT manufacturing associates and related support personnel currently working in Braselton. At the close of the transaction, Solectron will assume certain assets, including manufacturing equipment, test equipment and inventory, and will begin manufacturing operations in a 100,000-square-foot leased facility on the MCEA campus.

In accordance with the letter of intent, MCEA-CMT will focus on its advanced engineering and product development expertise. The company will continue to use its worldwide engineering resources to design and develop a broad range of innovative wireless products for the North American market. Those products will be sold and serviced by MWCI. In addition, to take full advantage of the manufacturing partnership, MWCI plans to expand its research and development capabilities by establishing a new design facility in the United States. The new facility, which will be dedicated to developing innovative digital wireless telephone designs specifically for the North American market, will begin with a staff of around 20. The facility will be expanded rapidly and is expected to employ 60 persons by the year 2000.

Solectron established a presence in Georgia in 1998 with the acquisition of the manufacturing assets of NCR's Retail Solutions Group in Duluth, Ga. This facility offers 116,000 square feet of manufacturing capacity, employs more than 580 associates and is both ISO 9001 and ISO 9002 certified. Solectron intends to merge MCEA-CMT operations in Braselton and Solectron's current Duluth operations into a new state-of-the-art manufacturing campus in Georgia, planned for completion in 1999. G. Robert Hawkins, Jr., Solectron's vice president and general manager in Georgia, will run the combined facility.

"This partnership further strengthens Solectron's current relationship with Mitsubishi Electric Corporation, who is both a global customer and strategic supplier," said Dr. Ko Nishimura, Solectron's chairman, president and CEO. "Mitsubishi Electric is the first Japanese electronics company to embrace this level of partnership and recognize the economic benefits of transferring its manufacturing assets to a global EMS leader like Solectron. This is a groundbreaking move by Mitsubishi Electric and we hope that more will follow. Japanese OEMs are beginning to reposition themselves to better use their assets, reduce their internal cost structures and become more competitive in the global marketplace."

"We believe this partnership capitalizes on both firms' strengths: Mitsubishi Electric's innovative technology and engineering excellence and Solectron's manufacturing expertise, as noted by its two Malcolm Baldrige National Quality Awards," added Mr. Harutsugu Okada, president and chief operating officer of Mitsubishi Consumer Electronics America's Cellular Mobile Telephone division. "Today's agreement benefits our employees, who have the opportunity to work for one of the preeminent manufacturing companies, and our customers, who will receive a broad range of products made of the highest quality and offered at competitive prices."

This release contains forward-looking statements based on current expectations that involve a number of risks and uncertainties. In particular, while the companies have executed a letter of intent, definitive agreements covering the transaction have not yet been signed. Moreover, in the event that the companies fail to satisfy conditions for closing, the transaction could terminate. No assurance may be given that the transaction will in fact close. Other potential risks and uncertainties that could cause actual events to differ materially are included in the SEC filings, including the Form 10-K and Form 10-Q for Solectron.

With more than 75 years of experience in providing reliable, high quality products to clients and consumers all over the world, Mitsubishi Electric Corporation (global.mitsubishielectric.com) is a recognized world leader in the manufacture, marketing and sales of electrical and electronic equipment used in information processing and communications, space development and satellite communications, consumer electronics, industrial technology, energy, transportation, and construction. Based in Tokyo, the company has operations in over 34 countries around the world and posted consolidated sales of over US $30 billion in fiscal 1997.

Established in 1986, Mitsubishi Consumer Electronics America, Inc.'s Cellular Mobile Telephone division is an ISO 9001 certified manufacturer of wireless communications devices. Located in Braselton, Ga., the company operates a 200,000-square-foot manufacturing plant. Mitsubishi Consumer Electronics America is one of 11 group companies of Mitsubishi Electric America, Inc., the U.S. holding company for Mitsubishi Electric Corporation.

Mitsubishi Wireless Communications, Inc. (www.mitsubishiwireless.com) is a joint venture between Mitsubishi Electric Corporation and the trading company Mitsubishi Corporation. MWCI is a leading manufacturer of wireless communications products, offering a complete line of cellular and CS products.

Founded in 1977, Solectron Corporation (www.solectron.com) provides integrated solutions across the entire product life cycle - from design to manufacturing to end-of-life services - for the world's leading electronics OEMs. Solectron offers its customers competitive outsourcing advantages such as access to advanced manufacturing technologies, shortened product time-to-market, reduced cost of production and more effective asset utilization.

The Company has received more than 150 quality and service awards from its customers in addition to the 1997 and 1991 Malcolm Baldrige National Quality Awards. Solectron is the first company to win the Malcolm Baldrige National Quality Award for Manufacturing twice in the 10-year history of the national program. The Company has more than 22,000 associates in 21 manufacturing facilities worldwide with more than five million square feet of manufacturing capacity. Revenues for the first nine months of fiscal year 1998 were $3.6 billion.