10-K

                   SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.
                          _____________________
                                    
                                FORM 10-K
                 ANNUAL REPORT UNDER SECTION 13 OR 15(d)
                 OF THE SECURITIES EXCHANGE ACT OF 1934
             ______________________________________________
      Mark One
      [x] Annual report pursuant to section 13 or 15(d) of the
      Securities Exchange Act of 1934 [Fee Required]
      For the Fiscal Year Ended August 31, 1995, or
      
      [  ] Transition report pursuant to section 13 or 15(d) of the
      Securities Exchange Act of 1934 [No Fee Required]
      For the Transition Period From                to        .
      Commission File Number 2-33228-40
                                    
                          SOLECTRON CORPORATION
         (Exact name of registrant as specified in its charter)
                                    
              California                         94-2447045
      State or other jurisdiction of          (I.R.S. Employer
      incorporation or organization         Identification Number)
      
             777 Gibraltar Drive, Milpitas, California 95035
          (Address of principal executive offices and Zip Code)
      Registrant's telephone number, including area code: (408) 957-8500
                                    
       Securities registered pursuant to Section 12(b) of the Act:
             Common Stock traded on New York Stock Exchange
     Liquid Yield Option TM Notes traded on New York Stock Exchange
                                    
    Securities registered pursuant to Section 12(g) of the Act: Common Stock
                                    
      Indicate by check mark whether the registrant (1) has filed
      all reports required to be filed by Section 13 or 15(d) of the
      Securities Exchange Act of 1934 during the preceding 12 months
      (or for such shorter period that the registrant was required
      to file such report(s)), and (2) has been subject to such
      filing requirements for the past 90 days.
               YES ___X___                  NO __________
      
      Indicate by check mark if disclosure of delinquent filers
      pursuant to Item 405 of Regulation S-K is not contained
      herein, and will not be contained, to the best of registrant's
      knowledge, in definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-K or any
      amendment to this Form 10-K.  [  ]
      
      The aggregate market value of the Registrant's Common Stock
      held by non-affiliates on October 31, 1995
      (based upon the last reported price of the Common Stock on the
      New York Stock Exchange on such date) was $__40.25__.
      
      As of October 31, 1995, there were _49,776,863_ shares of the
      Registrant's Common Stock outstanding.
      
                   DOCUMENTS INCORPORATED BY REFERENCE
                                    
      The Registrant's definitive Proxy Statement for the Annual Meeting of
      Shareholders to be held on January 9, 1996, which the Company will
      file with the Securities and Exchange Commission within 120 days
      after the end of the fiscal year covered by this report is incorporated
      by reference in Part III of this Form 10-K to the extent stated herein.
      
                          SOLECTRON CORPORATION
                      1995 FORM 10-K ANNUAL REPORT
                            TABLE OF CONTENTS
                                    
      
                                       Part I                            Page
 
                Item 1.        Business                                     3
      
                Item 2.        Properties                                  12
      
                Item 3.        Legal Proceedings                           12
      
                Item 4.        Submission of Matters to a Vote of
                               Security Holders                            12
      
                                       Part II
                                    
                Item 5.        Market for the Registrant's Common
                               Equity and Related Stockholder Matters      13
      
                Item 6.        Selected Financial Data                     13
      
                Item 7.        Management's Discussion and Analysis
                               of Financial Condition and Results of
                               Operations                                  13
      
                Item 8.        Financial Statements and
                               Supplementary Data                          18
      
                Item 9.        Changes in and Disagreements with
                               Accountants on Accounting and
                               Financial Disclosure                        31
      
                                Part III
                                    
                Item 10.       Directors and Executive Officers of
                               the Registrant                              31
      
                Item 11.       Executive Compensation                      35
      
                Item 12.       Security Ownership of Certain
                               Beneficial Owners and Management            35
      
                Item 13.       Certain Relationships and Related
                               Transactions                                35
      
                                     Part IV
                                    
                Item 14.       Exhibits, Financial Statement
                               Schedules and Reports on Form 8-K           35
      
                               Signatures                                  36
      





                                 Part I
                                    
      ITEM 1.   BUSINESS
      
            Solectron  Corporation  is an  independent  provider  of
      customized  manufacturing  services  to  electronics  original
      equipment  manufacturers  (OEMs). Solectron  provides  a  wide
      variety   of   pre-manufacturing,  manufacturing   and   post-
      manufacturing services.  The Company's goal is  to  offer  its
      customers  competitive advantages such as access  to  advanced
      manufacturing  technologies, shortened product time-to-market,
      reduced   cost   of   production  and  more  effective   asset
      utilization  that  can  be  attained  from  outsourcing  their
      manufacturing.  The Company currently conducts  operations  in
      the  Western  and Eastern United States, Europe and  Southeast
      Asia.  The  Company  believes that the geographically  diverse
      locations of its facilities enable it to build closer regional
      relationships  with  its  customers and  to  better  meet  its
      customer's cost and local market content requirements.
      
            Solectron Corporation was incorporated in California  in
      August  1977.  Solectron's corporate headquarters are  located
      at  777  Gibraltar  Drive, Milpitas,  California  95035.   The
      Company's  telephone  number  is   (408)  957-8500.   As  used
      herein,  "Solectron"  and  the "Company"  refer  to  Solectron
      Corporation and its subsidiaries, unless the context otherwise
      requires.
      
      Industry Overview
      
            Solectron is benefiting from increased worldwide  market
      acceptance  of  the  use of manufacturing specialists  in  the
      electronics  industry. Many electronics OEMs have adopted  and
      are   becoming   increasingly   reliant   upon   manufacturing
      outsourcing strategies. The Company believes the trend towards
      outsourcing   manufacturing  will   continue.   OEMs   utilize
      manufacturing  specialists  for  many  reasons  including  the
      following:
      
      Reduce  Time to Market.  Due to intense competitive  pressures
      in  the electronics industry, OEMs are faced with increasingly
      shorter product life-cycles and therefore have a growing  need
      to reduce the time required to bring a product to market. OEMs
      can  reduce  their  time  to market by using  a  manufacturing
      specialist's  manufacturing expertise and infrastructure.
      
      Reduce Capital Investment.  As electronic products have become
      more  technologically advanced, the manufacturing process  has
      become  increasingly automated, requiring a greater  level  of
      investment  in  capital  equipment. Manufacturing  specialists
      enable   OEMs   to  gain  access  to  advanced   manufacturing
      facilities,   thereby  reducing  the  OEMs'  overall   capital
      equipment requirements.
      
      Focus   Resources.   Because  the  electronics   industry   is
      experiencing  greater  levels of competition  and  more  rapid
      technological  change, many OEMs increasingly are  seeking  to
      focus  their resources on activities and technologies in which
      they   add  the  greatest  value.  By  offering  comprehensive
      electronics  assembly  and  related  manufacturing   services,
      manufacturing  specialists allow OEMs to focus  on  their  own
      core competencies such as product development and marketing.
      
      Access  Leading Manufacturing Technology.  Electronic products
      and   electronics   manufacturing   technology   have   become
      increasingly  sophisticated and complex, making  it  difficult
      for OEMs to maintain the necessary technological expertise  to
      manufacture  products internally. OEMs are motivated  to  work
      with a manufacturing specialist in order to gain access to the
      specialist's  expertise  in  interconnect,  test  and  process
      technologies.
      
      Improve  Inventory  Management  and  Purchasing Power.
      Electronics  industry  OEMs  are  faced  with  increasing
      difficulties   in  planning,  procuring  and  managing   their
      inventories efficiently due to frequent design changes,  short
      product   life-cycles,   large   investments   in   electronic
      components,  component  price fluctuations  and  the  need  to
      achieve economies of scale in materials procurement. OEMs  can
      reduce  production costs by using a manufacturing specialist's
      volume procurement capabilities.  In addition, a manufacturing
      specialist's  expertise  in inventory management  can  provide
      better  control over inventory levels and increase  the  OEM's
      return on assets.
      
      Access   Worldwide  Manufacturing  Capabilities.    OEMs   are
      increasing  their international activities  in  an  effort  to
      lower   costs   and  access  foreign  markets.   Manufacturing
      specialists with worldwide capabilities are able to offer such
      OEMs a variety of options on manufacturing locations to better
      address  their  objectives regarding cost, shipping  location,
      frequency  of  interaction with manufacturing specialists  and
      local content requirements of end-market countries.
      
      Strategy
      
      The Company's strategy emphasizes the following key elements:
      
      Quality.   Solectron  believes  that  product  quality  is   a
      critical  success  factor  in  the  electronics  manufacturing
      market. The Company strives for continuous improvement of  its
      processes and has adopted a number of quality improvement  and
      measurement  techniques  to  monitor  its  performance.    The
      Company  has  received numerous superior service  and  quality
      awards, including the Malcolm Baldrige National Quality  Award
      in  October  1991,  the State of California Governor's  Golden
      State  Award in September 1994, and numerous awards  from  its
      customers such as Apple Computer, Applied Materials,  Exabyte,
      Hewlett-Packard   Company,  International  Business   Machines
      Corporation  (IBM) and Sun Microsystems, Inc. Nearly  all  the
      Company's   manufacturing  facilities  are   certified   under
      ISO-9002,  an international quality standard for manufacturing
      and distribution management systems.
      
      Manufacturing   Partnerships.    An   important   element   of
      Solectron's strategy is to establish partnerships  with  major
      and  emerging OEM leaders in the electronics industry. Due  to
      the  costs inherent in supporting customer relationships,  the
      Company  focuses  its  efforts on  customers  with  which  the
      opportunity exists to develop long-term business partnerships.
      The  Company's  goal  is to provide its customers  with  total
      manufacturing solutions for both new and more mature products,
      as   well   as  across  product  generations.  The   Company's
      manufacturing  services  range  from  providing   just-in-time
      delivery  on  low  to  medium volume turnkey  and  consignment
      projects  and projects that require more value-added services,
      to  servicing  OEMs that require price-sensitive,  high-volume
      production.  In order for the Company to continue  to  develop
      long-term  business  partnerships with  leading  OEMs  in  the
      electronics industry, the Company will be required to continue
      to  increase  staffing  and other expenses,  as  well  as  its
      expenditures  on capital equipment and leasehold improvements.
      The  Company's  customers generally  do  not  commit  to  firm
      production  schedules for more than one quarter.   Should  the
      Company increase its expenditures in anticipation of a  future
      level  of  sales which does not materialize, its profitability
      would  be  adversely  affected.  On  occasion,  customers  may
      require  rapid  increases in production  which  can  place  an
      excessive  burden  on the Company's resources.   In  order  to
      maintain its sales growth and profitability, the Company  will
      be required to continue managing its assets efficiently.
      
      Turnkey Capabilities.  Another element of Solectron's strategy
      is to provide a complete range of manufacturing management and
      value-added  services, including materials  management,  board
      design,  concurrent engineering, assembly of  complex  printed
      circuit   boards   and  other  electronic   assemblies,   test
      engineering,  software manufacturing, accessory packaging  and
      post-manufacturing  services. The  Company  believes  that  as
      manufacturing technologies become more complex and as  product
      life-cycles  shorten,  OEMs  will  increasingly  contract  for
      manufacturing on a turnkey basis as they seek to reduce  their
      time  to  market  and  capital asset and  inventory  costs.  A
      substantial  portion  of the Company's  revenue  is  from  its
      turnkey  business. The Company believes that  the  ability  to
      manage  and  support  large turnkey  projects  is  a  critical
      success  factor  and a significant barrier to  entry  for  the
      market  it serves. In addition, the Company believes that  due
      to  the  difficulty  and  long lead-time  required  to  change
      manufacturers,  turnkey projects generally increase  an  OEM's
      dependence  on  its  manufacturing  specialist,  resulting  in
      greater stability of the Company's customer base and in closer
      working  relationships.  The Company has  been  successful  in
      establishing sole source positions with many of its  customers
      for certain of their products.
      
      Advanced Manufacturing Process Technology.  Solectron  intends
      to   continue  to  offer  its  customers  the  most   advanced
      manufacturing  process technologies, including  surface  mount
      technology   (SMT)   assembly   and   testing   and   emerging
      interconnect   technologies.   The   Company   has   developed
      substantial  SMT  expertise including  advanced,  vision-based
      component placement equipment. The Company believes  that  the
      cost  of  SMT assembly facilities and the technical capability
      required to operate a high-yield SMT operation are significant
      competitive factors in the market for electronic assembly. The
      Company   also   has  the  capability  to  manufacture   using
      tape-automated-bonding, chip-on-substrate, chip-on-flex, ball-
      grid  arrays and other more advanced manufacturing  processes.
      However,   to   date  the  Company  has  not  utilized   these
      manufacturing processes on a significant scale.
      
      Diverse  Geographic  Operations.   An  important  element   of
      Solectron's strategy is to establish production facilities  in
      areas   of   high  customer  density  or  where  manufacturing
      efficiencies  can  be  achieved.  The  Company  currently  has
      operations  in  the Western and Eastern United States,  Europe
      and  Southeast Asia. The Company believes that its  facilities
      in  these  diverse  geographic locations enable  Solectron  to
      better  address  its  customers'  objectives  regarding  cost,
      shipping location, frequency of interaction with manufacturing
      specialists  and  local  content  requirements  of  end-market
      countries. See "International Manufacturing Capability" below.
      In  addition,  the  Company also has  a  business  development
      office  in  Tokyo,  Japan. Solectron intends  to  continue  to
      expand  its operations as necessary to continue to  serve  its
      existing customers and to develop new business.
      
      International Manufacturing Capability
      
      Western United States.  The Company's headquarters and largest
      manufacturing  operations  are  located  in  Silicon   Valley,
      principally  at  a single site in Milpitas,  California.   The
      Company believes that the location of these facilities in  one
      of the largest concentrations of OEM electronics manufacturers
      permits  it  to more efficiently provide electronic  assembly,
      manufacturing management and other services to such OEMs.   In
      September  1993, the Company acquired operations  in  Everett,
      Washington.  In addition to serving customers in that  region,
      this facility specializes in low volume, high mix production.
      
      Eastern  United States.  The Company's Eastern  United  States
      operations are located in Charlotte, North Carolina  and  were
      acquired in September 1992 from IBM.  This facility is staffed
      by  personnel  with  extensive electronics  manufacturing  and
      product  design  experience. The  Company  believes  that  the
      Charlotte  facility  allows it to better pursue  new  business
      opportunities  with  new and existing customers  with  Eastern
      United  States operations because of Charlotte's status  as  a
      transportation hub and its relative proximity to major Eastern
      United States electronics markets.
      
      Europe.   The Company has three European sites.  One  site  is
      located in Bordeaux, France and was also acquired in September
      1992  from  IBM.  The Bordeaux facility is staffed largely  by
      former   IBM   employees,  many  with  extensive   electronics
      manufacturing  and  product design experience.  In  connection
      with the acquisitions from IBM, IBM committed to purchase from
      the Bordeaux facility certain volumes of sub-assemblies for  a
      period of  three  years  ending  in  December 1995.  While the 
      Company expects to continue to do business with IBM  after the
      agreement  expires,  there  can  be  no  guarantee  that  such
      business  will  be  avaialable  at  satisfactory  terms to the
      Company.   However,  Solectron  believes   that  its  Bordeaux
      facility will continue to allow it to better serve IBM and  to
      develop  new  business  with  other  customers having European
      operations. 

           In September 1993, the  Company also acquired  operations
      in Dunfermline, Scotland. The facility was  expanded in fiscal
      1995  to  accommodate  increased  customer demand.   Solectron
      believes that this  facility  allows  it  to better  serve the
      many  electronics  OEMs  located  in  the  United Kingdom  and
      Ireland.
          
            In November 1995,  the  Company  completed a transaction
      with  Hewlett-Packard  GmbH  (HP),  a  subsidiary  of  Hewlett
      -Packard  Company,  to  acquire  the  assets  of  HP's printed
      circuit board assembly operation in Boeblingen, Germany.  This 
      facility is expected to allow the Company to better serve  the
      German market and Hewlett-Packard.
      
      Southeast  Asia.   The Company's Southeast Asia  manufacturing
      operation  is  located in Penang, Malaysia and was  opened  in
      1991.  This  facility  was expanded  in  fiscal  1994  due  to
      increased   customer   demand.  The   Penang   operation   was
      established  to  better  serve the  needs  of  OEMs  requiring
      price-sensitive,  high-volume production capabilities  and  to
      provide  more  efficient manufacturing services  to  customers
      located  in  Southeast Asia. The facility  currently  provides
      electronics assembly, materials management and other  services
      to customers located in Malaysia, Singapore, Japan, the United
      States and other locations.
      
            The  Company  has  established operations  in  five  new
      locations  since September 1992.  As the Company  manages  the
      existing  operations  and  expands  geographically,   it   may
      experience  certain  inefficiencies  from  the  management  of
      geographically   dispersed  operations.   In   addition,   the
      Company's results of operations will be adversely affected  if
      these  new facilities do not achieve revenue growth sufficient
      to  offset  increased expenditures associated with  geographic
      expansion.
      
            In fiscal 1995, approximately 38% of the Company's sales
      were  from  operations outside of the  United  States.   As  a
      result  of  continued  customer demand overseas,  the  Company
      expects  foreign  sales  as a percentage  of  total  sales  to
      increase.   As  a result of its foreign sales and  facilities,
      the  Company's  operations  are  subject  to  risks  of  doing
      business  abroad,  including  fluctuations  in  the  value  of
      currency,  export duties, import controls and  trade  barriers
      (including  quotas), restrictions on the  transfer  of  funds,
      employee  turnover,  work stoppages,  longer  payment  cycles,
      greater  difficulty in accounts receivable collection, burdens
      of  complying  with  a wide variety of foreign  laws  and,  in
      certain  parts of the world, political instability.  While  to
      date  these  factors  have not had an adverse  impact  on  the
      Company's  results of operations, there can  be  no  assurance
      that there will not be such an impact in the future.
      
      Manufacturing
      
       Solectron's Approach
      
            To  achieve  excellence  in manufacturing,  the  Company
      combines   advanced   manufacturing   technology,   such    as
      computer-aided  manufacturing  and  testing,   with   Japanese
      manufacturing      techniques,     including      just-in-time
      manufacturing,  total  quality  control,  statistical  process
      control   and   continuous  flow  manufacturing.  Just-in-time
      manufacturing  is  a  production  technique  which   minimizes
      work-in-process inventory and manufacturing cycle  time  while
      enabling the Company to deliver products to customers  in  the
      quantities and time frame required. Total quality control is a
      management  philosophy which seeks to impart  high  levels  of
      quality  in every operation of the Company and is accomplished
      by  the  setting  of quality objectives for  every  operation,
      tracking  performance  against those  objectives,  identifying
      work  flow  and  policy  changes required  to  achieve  higher
      quality  levels  and a commitment by executive  management  to
      support   changes   required  to   deliver   higher   quality.
      Statistical  process  control  is  a  set  of  analytical  and
      problem-solving  techniques based on  statistics  and  process
      capability  measurements through which the Company  can  track
      process  inputs and resulting quality and determine whether  a
      process is operating within specified limits. The goal  is  to
      reduce  variability  in  the process,  as  well  as  eliminate
      aberrations  which contribute to quality below the  acceptable
      range  of  each process performance standard. Continuous  flow
      manufacturing   is  a  manufacturing  technique   for   making
      operators   responsible  for  quality,   thereby   eliminating
      separate   quality   control   staffs   and   minimizing   the
      perpetuation of defects through large quantities of  assembled
      units.
      
            In  order  to  successfully implement  these  management
      techniques,  Solectron  has developed the  ability  to  timely
      collect  and  utilize  large  amounts  of  data.  The  Company
      believes  this  ability is critical to a  successful  assembly
      operation  and  represents a significant  competitive  factor,
      especially in large turnkey projects. To manage this data, the
      Company  uses  sophisticated  computer  systems  for  material
      resource   planning,   shop  floor  control,   work-in-process
      tracking,   statistical  process  control  and  activity-based
      product costing.
      
            In  implementing its manufacturing approach, the Company
      emphasizes    timely   delivery   and   accurate,   up-to-date
      documentation  for  each  product.  The  Company  develops  an
      appropriate   production  process  and  a  complete   set   of
      manufacturing  process instructions, inspection  plans  and  a
      quality  assurance  plan. In the case of turnkey  orders,  the
      Company  analyzes each customer's materials specifications  to
      identify  the  suppliers from whom to purchase the  materials.
      The  Company  then  plans  and executes  purchase  orders  and
      receives,   inspects  and  warehouses  components,   expedites
      critical  components and delivers a complete set of components
      to  the  production floor for assembly in sufficient  time  to
      meet customer requirements.
      
             Responsiveness   to  customers,  particularly   as   to
      engineering  changes once manufacturing has commenced,  is  an
      important  component  of  Solectron's manufacturing  approach.
      Many  products manufactured by the Company are  in  the  early
      stages of their product life cycle and therefore may have many
      design  or  engineering changes. Upon receiving an engineering
      change  notice,  the  Company identifies the  impact  of  such
      changes on the production process, current inventory and  open
      purchase orders. To support a continuous production flow while
      minimizing  excess  and  obsolete  inventory  costs  for   the
      customer,  the  Company  restructures bills  of  material  and
      expedites  orders  for  new  components,  as  authorized.  The
      Company also identifies and makes changes to its manufacturing
      instructions  and  test  plans.  In  order  to  assure  prompt
      customer response, the Company assigns each project a  project
      manager,  quality assurance engineer, product  engineer,  test
      engineer   and  customer  service  representative.   Solectron
      maintains  regular  contact  with  its  customers  to   assure
      adequate information exchange, document control and activities
      coordination necessary to support a high level of quality  and
      on-time delivery.
      
       Electronic Assembly and Other Services
      
             Solectron's  electronic  assembly  activities   consist
      primarily  of  the placement and attachment of electronic  and
      mechanical  components on printed circuit boards and  flexible
      cables.  The  Company also assembles higher-level  sub-systems
      and  systems incorporating printed circuit boards and  complex
      electromechanical components, in some cases manufacturing  and
      packaging  products for shipment directly  to  the  customer's
      distributors.   In   addition,   Solectron   provides    other
      manufacturing    services   including   refurbishment,    disk
      duplication   and   packaging  services  and  remanufacturing.
      Solectron  manufactures  on  a turnkey  basis  with  Solectron
      directly procuring some or all of the components necessary for
      production, and on a consignment basis, where the OEM customer
      supplies all components for assembly.
      
            In  conjunction with its assembly activities,  Solectron
      also   provides  computer-aided  testing  of  printed  circuit
      boards,    sub-systems   and   systems,   which    contributes
      significantly to the Company's ability to deliver high quality
      products  on  a  consistent basis. The Company  has  developed
      specific  strategies  and routines to test  board  and  system
      level  assemblies. In-circuit tests verify that all components
      have  been properly inserted and that the electrical  circuits
      are  complete.  Functional tests determine  if  the  board  or
      system assembly is performing to customer specifications.  The
      Company either designs and procures test fixtures and develops
      its own test software or utilizes the customer's existing test
      fixtures  and  test software. In addition,  the  Company  also
      provides  environmental stress tests of the  board  or  system
      assembly.
      
            Solectron  provides turnkey manufacturing management  to
      meet  its  customers' requirements, including procurement  and
      materials  management and consultation  on  board  design  and
      manufacturability.  Individual customers  may  select  various
      services  from  among  the Company's  full  range  of  turnkey
      capabilities.
      
            Procurement  and materials management  consists  of  the
      planning,  purchasing, expediting, warehousing, preparing  and
      financing of the components and materials required to assemble
      a  printed  circuit  board  or electronic  system.  OEMs  have
      increasingly utilized electronic manufacturing specialists  to
      purchase  all  or  some  components  directly  from  component
      manufacturers or distributors and to finance and warehouse the
      components.
      
            The  Company  also assists its customers  in  evaluating
      board  designs for manufacturability. Solectron evaluates  the
      board  design  for ease and quality of manufacture  and,  when
      appropriate, recommends design changes to reduce manufacturing
      costs  or  lead times or to increase the quality  of  finished
      assemblies.  The Company also offers board design services for
      a  fee.  Board design services consist of the engineering  and
      design associated with the arrangement and interconnection  of
      specified  components on printed circuit boards to achieve  an
      OEM's desired level of functionality.
      
      Sales and Marketing
      
           Sales and marketing at Solectron is an integrated process
      involving direct salespeople and project managers, as well  as
      the   Company's   senior  executives.   The  Company's   sales
      resources are directed at multiple management and staff levels
      within  targeted  accounts. The Company also uses  independent
      sales representatives in certain geographic areas. The Company
      also receives unsolicited inquiries resulting from advertising
      and  public  relations activities, as well as  referrals  from
      current  customers. These opportunities are evaluated  against
      the Company's customer selection criteria and are assigned  to
      direct  salespeople  or independent sales representatives,  as
      appropriate.  Historically, the Company  has  had  substantial
      recurring sales from existing customers.
                                    
           Over 90% of the Company's net sales during fiscal 1995
      were derived from customers which were also customers during
      fiscal 1994. Although Solectron seeks to diversify its
      customer base, a small number of customers currently are
      responsible for a significant portion of the Company's net
      sales.  During fiscal 1995, 1994, and 1993, the Company's ten
      largest customers accounted for over 70%, 73%, and 75% of
      consolidated net sales respectively.  However, with the
      exception of IBM Corporation, which represented 21%, 28% and
      26% of net sales in fiscal 1995, 1994 and 1993, respectively,
      Apple Computer, Inc. which represented 12% of net sales in
      fiscal 1994, and Sun Microsystems, Inc. which represented 12%
      of net sales in fiscal 1993, no other individual customer
      accounted for more than 10% of the Company's net sales in any
      of these years.
      
       Backlog
      
            Backlog  consists of contracts or purchase  orders  with
      delivery  dates scheduled within the next twelve  months.   At
      August  31,  1995, Solectron's backlog was approximately  $520
      million.  The backlog was approximately $350 million at August
      31,   1994.    Because  customers  may  cancel  or  reschedule
      deliveries,  backlog is not a meaningful indicator  of  future
      financial results.
      
      Competition
      
            The  electronic assembly and manufacturing  industry  is
      comprised  of  a large number of companies, several  of  which
      have  achieved  substantial market share.   The  Company  also
      faces competition from current and prospective customers which
      evaluate  Solectron's  capabilities  against  the  merits   of
      manufacturing  products internally.  Solectron  competes  with
      different  companies  depending on  the  type  of  service  or
      geographic  area.   Certain of the Company's competitors  have
      broader  geographic  breadth.   They  also  may  have  greater
      manufacturing,   financial,  research  and   development   and
      marketing  resources than the Company.  The  Company  believes
      that  the primary basis of competition in its targeted markets
      is  manufacturing  technology,  quality,  responsiveness,  the
      provision  of  value-added  services  and  price.   To  remain
      competitive,   the   Company   must   continue   to    provide
      technologically  advanced  manufacturing  services,   maintain
      quality  levels,  offer flexible delivery  schedules,  deliver
      finished products on a reliable basis and compete favorably on
      the  basis  of  price.   The Company currently  may  be  at  a
      competitive   disadvantage  as  to  price  when  compared   to
      manufacturers  with lower cost structures,  particularly  with
      respect  to  manufacturers with established  facilities  where
      labor costs are lower.
      
      Employees
      
            As  of  August  31,  1995, the Company  employed  11,049
      persons,   including  2,982  temporary  employees.    Of   the
      Company's 11,049 persons employed, 4,579 were employed by  the
      Company's foreign operations.
      
      Patents and Trademarks
      
            The Company obtained a limited number of U.S. patents in
      1995 related to the process and equipment used in  its surface
      mount  technology.  These patents are considered  valuable  to
      the  Company. 
     
             Although  the  Company  does   not  believe  that   its
      manufacturing process  infringes  on  the intelectual property
      rights of third  parties, there can be no assurance that third
      parties  will  not  assert  infringement  claims  against  the
      Company in the future.  If  such  an  assertion  where  to  be
      made,  it  may  become  necessary  or  useful  for the Company
      to enter into licensing arrangements or  to  resolve  such  an
      issue  through litigation.  However, there can be no  asurance
      that  such license rights would be available to the Company on
      commercially  acceptable  terms  or  that  any such litigation
      could  be  resolved favorably.  Additionally, such  litigation
      could be lengthy  and costly and could have a material adverse
      effect  on  the  Company's  financial   condition   regardless
      of  the  outcome  of  such litigation.   

             The Company does not believe that trademark  protection
      is an important competitive factor in its market.
      
      
      ITEM 2:   PROPERTIES
      
      The Company's domestic manufacturing facilities are located in
      California,  North  Carolina and Washington.   In  and  around
      Milpitas,   California,    Solectron    Corporation     leases
      approximately 1,112,000 square feet of facilities under leases
      expiring   through  2000.   In  Charlotte,   North   Carolina,
      the   Company  owns   a  single   facility   of  approximately
      175,000  square  feet on 73  acres  of  land  and  occupies an  
      additional  facility  of  approximately  36,000  square   feet
      under a  short-term  lease.   In  Everett,  Washington,    the
      Company leases approximately 70,000  square feet.
      
      In Europe, the Company owns approximately  319,000 square feet
      of facilities on 240 acres of land in  Bordeaux,  France.   In
      Dunfermline,   Scotland,  the  Company   owns  two  facilities
      totaling  approximately 213,000 square feet  on  approximately
      15 acres of land.  In connection   with   the   November  1995
      acquisition its  site in Boeblingen,  Germany, the Company now
      leases  facilities in Boeblingen approximating 50,000   square
      feet.
      
      The  Company's  Asian manufacturing operation  is  located  in
      Penang,  Malaysia.   The  Company owns facilities  of  196,000
      square feet on 5 acres of land which are leased pursuant to  a
      60-year lease.
      
      Around  the  world, the Company is subject  to  a  variety  of
      environmental  regulations  relating  to  the  use,   storage,
      discharge and disposal of hazardous chemicals used during  its
      manufacturing process.  Any failure by the Company  to  comply
      with present and future regulations could subject it to future
      liabilities  or  the suspension of production.   In  addition,
      such  regulations  could  restrict the  Company's  ability  to
      expand  its facilities or could require the Company to acquire
      costly  equipment  or to incur other significant  expenses  to
      comply with environmental regulations.
      
      
      ITEM 3:   LEGAL PROCEEDINGS
      
      Not applicable.
      
      
      ITEM 4:   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
      
      No matters were submitted to a vote of security holders during
      the fourth quarter of the fiscal year covered by this report.
                                    
                                    
                                 PART II
                                    
                                    
      ITEM 5:   MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
      STOCKHOLDERS MATTERS
      
      Common Stock Information
      The following table sets forth the quarterly high and low per
      share sales prices of the Company's common stock for the two-
      year period ended August 31, 1995, as quoted on the New York
      Stock Exchange.
     
      Per share trading price range:
 
          First Quarter    Second Quarter    Third Quarter    Fourth Quarter
      
           1995   1994       1995    1994     1995    1994      1995   1994
    High  31 3/8  28 5/8    27 1/4  33 1/4   31      32 1/2    38 5/8  31 1/4
    Low   24 3/4  20 3/4    22 1/2  26 1/8   22 7/8  25 3/4    30 1/8  23 3/4
      
      
      ITEM 6:   SELECTED FINANCIAL DATA
      
      Five year selected financial highlights
      (in thousands except per share data)

  For the years ended 8/31,      1995       1994      1993     1992     1991
  
  Consolidated Statement of Income Data:
              
  Net Sales                  $2,065,559 $1,456,779 $836,326 $406,883 $265,363   
  Operating income              123,434     88,350   53,140   27,153   17,903
  Income before income taxes    120,494     84,159   48,613   24,144   16,442
  Net income                     79,526     55,545   30,600   14,488    9,229 
  Fully diluted net   
    income per share              $1.62      $1.18    $0.75    $0.44    $0.35  


  Consolidated Balance Sheet Data:
      
  Working capital              $355,603  $309,203  $265,025  $199,254 $35,313
  Total Assets                  940,855   766,395   603,285   308,737 135,117 
  Long-term debt and capital     30,043   140,709   137,011   130,933  12,479
   lease obligations
  Shareholder's equity          538,141   330,789   260,980   104,245  47,146 
     



      ITEM 7:   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
      CONDITION AND RESULTS OF OPERATIONS
      
      General
      Solectron's net sales are derived from sales to electronics
      original equipment manufacturers. The majority of the
      Company's customers compete in the telecommunications,
      computer peripherals, workstation, and personal computer
      segments of the electronics industry. The Company uses
      advanced manufacturing technologies in assembly and
      manufacturing management of complex printed circuit boards and
      electronics systems.
           Operating results are affected by a number of factors,
      including the degree of turnkey manufacturing, the material
      content and volume of products built, manufacturing
      efficiencies, utilization of capacity, start-up costs associated
      with new customer projects, and price competition. Over the
      past several years, the Company's strategy has been to increase
      the percentage of sales it derives from turnkey manufacturing,
      which currently represents a substantial portion of the
      Company's sales. Turnkey projects, in which the Company
      procures some or all of the components necessary for production,
      typically generate higher net sales and higher gross profits
      with lower gross margins than consignment projects due
      to the inclusion in the Company's operating results of sales
      and costs associated with the purchase and sale of components.
      The increase in gross profit and the decrease in gross margin
      over the past several years has been due primarily to this shift
      toward turnkey manufacturing. More recently, the Company has
      assembled products with varying degrees of material content,
      which has caused the Company's gross margin to fluctuate. In
      addition, the degree of startup costs and inefficiencies
      associated with new customer projects has affected the
      Company's gross margin.
           The Company has manufacturing operations in six
      locations: three in the U.S., two in Europe, and one in
      Malaysia. Additionally, on August 17, 1995, the Company
      executed definitive agreements with Hewlett-Packard GmbH (HP),
      a subsidiary of Hewlett-Packard Company, to acquire HP's
      printed circuit board assembly operation in Boeblingen,
      Germany. This transaction is expected to close in November
      1995. As the Company manages its existing operations and
      expands geographically, it may experience certain
      inefficiencies from the management of geographically
      dispersed operations.
           Around the world, the Company is subject to a variety of
      environmental regulations relating to the use, storage,
      discharge, and disposal of hazardous chemicals used during its
      manufacturing process. Any failure by the Company to comply
      with present and future regulations could subject it to future
      liabilities or the suspension of production. In addition, such
      regulations could restrict the Company's ability to expand its
      facilities or could require the Company to make significant
      expenditures to comply with environmental regulations.
           The Company competes within the electronics manufacturing
      services (EMS) segment of the electronics industry. The EMS
      segment is currently growing at a faster rate than the overall
      electronics industry, but the EMS segment is also comprised of
      a large number of companies, some of which have achieved
      substantial market share. In addition to competing with other
      EMS companies, the Company also faces competition from current
      and prospective customers that evaluate Solectron's
      capabilities against the merits of manufacturing products
      internally. The Company believes that the primary basis of
      competition in its targeted markets is manufacturing
      technology, quality, responsiveness, the provision of value-
      added services, and price.

      Results of Operations
      The following table sets forth the percentage of net sales of
      certain items in the Consolidated Statements of Income. The
      financial information and the discussion below should be read
      in conjunction with the Consolidated Financial Statements and
      Notes thereto.

          Years ended August 31,     1995      1994      1993
          Net sales                 100.0%    100.0%    100.0%
          Cost of sales              90.2      90.0      88.2
      
          Gross profit                9.8      10.0      11.8
          Operating expenses:
            Selling, general and
              administrative          3.6       3.6       5.0
          Research and development    0.2       0.3       0.4
      
          Operating income            6.0       6.1       6.4
          Net interest expense        0.1       0.3       0.6
      
          Income before income taxes  5.9       5.8       5.8
          Income taxes                2.0       2.0       2.1
      
          Net income                  3.9%      3.8%      3.7%
      

      Net Sales
      During the past few years, the Company's net sales have
      increased significantly due primarily to an increasing trend
      toward outsourcing within the electronics industry. In fiscal
      1995, net sales grew to $2.1 billion, an increase of $609
      million, or 42%, over the previous year. Net sales in fiscal
      1994 were $1.5 billion, an increase of $620 million, or 74%,
      over fiscal 1993. The increase in fiscal 1995 was due to
      increased orders from existing customers, the addition of new
      customers, and growth in the Company's turnkey business. The
      increase in fiscal 1994 was due to increased orders from
      existing customers, conversion of certain customers to turnkey
      arrangements, and the acquisition in September 1993 of
      manufacturing sites in Scotland and Washington.
           The Company's two largest customers during fiscal 1995
      and 1994 were International Business Machines Corporation
      (IBM) and Apple Computer, Inc. (Apple). Net sales to IBM in
      fiscal 1995 and 1994 were 21% and 28% of consolidated net sales,
      respectively. Net sales to Apple in fiscal 1995 and 1994 were
      less than 10% and 12% of consolidated net sales, respectively.
      While net sales to these customers increased in absolute amounts
      during fiscal 1995 compared to fiscal 1994, the Company has
      obtained significant new business from other customers,
      thereby reducing its dependency on these accounts. Net sales
      to the Company's top ten customers accounted for 70% of
      consolidated net sales during both fiscal 1995 and fiscal 
      1994. The Company is dependent upon continued revenues from
      IBM, Apple, and the rest of its top ten customers. Any material
      change in orders from these or other customers could have a
      material effect on the Company's results of operations.
           Net sales at the Company's foreign sites grew at a faster
      rate over the last year than net sales at the Company's
      domestic sites. Foreign locations contributed 38% of
      consolidated net sales in fiscal 1995, compared to 35% for
      fiscal 1994. As a result of the Company's foreign sales and
      facilities, the Company's operations are subject to risks of
      doing business abroad, including fluctuations in the value of
      currency, changes to import and export regulations, possible
      restrictions on the transfer of funds, and in certain parts of
      the world, political instability. While to date these dynamics
      have not had a materially adverse impact on the Company's
      results of operations, there can be no assurance that there
      will not be such an impact in the future.
           The Company's operation in California contributed a
      substantial portion of the Company's net sales and operating
      income during fiscal 1995 and 1994. The performance of this
      operation is expected to continue as a significant factor in
      the overall financial results of the Company. Any material
      change to the customer base, product mix, efficiency, or other
      attributes of this site could have a material effect on the
      Company's consolidated results of operations.
           Over the past few years, the Company's revenues have
      grown substantially. The Company believes that its ability to
      continue to achieve rapid growth will depend primarily on
      growth in sales to existing customers for their current and
      future product generations and successful marketing to new
      customers. The Company has no firm long-term volume
      commitments from its customers and over the last few years has
      experienced reduced lead-time in customer orders. Customer
      contracts can be canceled and volume levels
      can be changed or delayed. The timely replacement of delayed,
      canceled, or reduced orders with new business cannot be
      assured. The Company has a manufacturing services agreement
      with IBM at the France facility that expires on December 31,
      1995. While the Company expects to continue business with IBM
      after the agreement expires, there can be no guarantee that
      such business will be available at satisfactory terms to the
      Company. Because of these factors, there can be no assurance
      that the Company's historical revenue growth rate will
      continue.
           The Company currently serves the electronics industry,
      which is subject to rapid technological change, product
      obsolescence, and price competition. These and other factors
      affecting the electronics industry, or any of the Company's
      major customers in particular, could have a materially
      adverse effect on the Company's results of operations.
      Gross Profit Gross profit increased by $55.5 million, or 38%,
      in fiscal 1995 compared to fiscal 1994 and $47.5 million, or
      48%, during fiscal 1994 compared to fiscal 1993. Gross margin
      decreased to 9.8% in fiscal 1995, from 10.0% in fiscal 1994
      and 11.8% in fiscal 1993. The slight decrease in gross margin
      in fiscal 1995 compared to fiscal 1994 resulted primarily from
      underutilization of the facility in France, manufacturing
      inefficiencies at the Scotland and North Carolina sites from
      new project start-up costs, and growth in turnkey business at
      the Scotland site. Offsetting these factors were improved
      efficiencies at the Company's operation in California
      and improvements in product mix. In fiscal 1994, the Company's
      gross margin was lower than fiscal 1993 due to an increase in
      turnkey business and larger concentrations of high volume, low
      margin business.
           In the future, the Company's gross margin is expected to
      depend primarily on product mix, the level of inefficiencies
      associated with new customer projects, and pricing within the
      electronics industry.
           While the availability of raw materials appears adequate
      to meet the Company's current revenue projections, component
      availability to support revenue increases beyond the Company's
      current plans is limited. Furthermore, availability of
      customer-consigned parts and unforeseen shortages of components 
      on the world market are beyond the Company's control and could
      adversely affect revenue levels and operating efficiencies.

      Selling, General and Administrative Expenses
      Selling, general and administrative (SG&A) expenses increased
      to $73.6 million in fiscal 1995, compared to $53.8 million in
      fiscal 1994 and $42.0 million in fiscal 1993. However, SG&A
      expenses as a percentage of net sales decreased to 3.6% in
      fiscal 1995 and 1994 from 5.0% in fiscal 1993, as the Company
      leveraged its fixed operating expenses. The increases in SG&A
      expenses during these periods were due primarily to growth in
      personnel and related departmental expenses at all
      manufacturing locations and investments in information
      systems. These expenditures are designed to support the
      increased size and complexity of the Company's business. In
      fiscal 1994, the increase in SG&A expenses was also due to the
      acquisitions of the Scotland and Washington sites in September
      1993. The Company anticipates SG&A expenses will increase in
      absolute amounts in the future as the Company builds the
      infrastructure necessary to support its current and
      prospective business.

      Research and Development Expenses
      The primary focus of the Company's recent research and
      development efforts has been on developing high density
      interconnecting technologies and deploying processes into
      manufacturing. Technologies include ball-grid array (plastic,
      ceramic, and tape platforms), chip-on-substrate by wire
      bonding, tape-automated bonding, flip-chip, VOC-free, no-clean
      manufacturing, no-lead soldering, and fluxless soldering.
      Research and development expenses increased
      to $4.8 million in fiscal 1995 from $4.2 million in fiscal
      1994 and $3.8 million in fiscal 1993.
 
      Net Interest Expense
      Net interest expense was $2.9 million in fiscal 1995, compared
      to $4.2 million in fiscal 1994 and $4.5 million in fiscal
      1993. The decrease in fiscal 1995 compared to fiscal 1994 was
      due primarily to the voluntary conversion of nearly 80% of the
      Company's outstanding zero-coupon subordinated notes during
      the fourth quarter of fiscal 1995.
 
      Income Taxes
      Income taxes increased to $41.0 million in fiscal 1995 from
      $28.6 million in fiscal 1994 and $18.0 million in fiscal 1993,
      due primarily to increased income before income taxes. The
      Company's effective income tax rate decreased from 37% in
      fiscal 1993 to 34% in fiscal 1994 and remained at 34% in
      fiscal 1995. The principal reasons for a lower effective
      income tax rate in fiscal 1995 and 1994 compared to fiscal
      1993 were an increase in profits from foreign operations
      which are taxed at lower rates than in the United States 
      and the impact of certain tax advantaged short-term investments
      in the United States. The Company has a tax holiday in Malaysia
      that expires in January 1997, subject to certain extensions. 
      If the tax holiday is not extended, the Company's effective
      income tax rate may increase.

      Liquidity and Capital Resources
      Working capital was $355.6 million at the end of fiscal 1995,
      an increase of $46.4 million from the end of fiscal 1994. This
      increase reflects primarily the growth in net sales during
      fiscal 1995 and the required investment in working capital to 
      support this growth. The increase in working capital was 
      financed primarily by cash generated from operations. The
      Company anticipates that further increases in working capital
      will be required to support anticipated revenue growth.
          
           During fiscal 1995 the Company invested $113.6 million
      in new capital assets, primarily surface mount assembly and test
      equipment to meet current and expected production levels. To
      support growth and to replace aging equipment, the Company
      expects capital expenditures in fiscal 1996 to be in the range
      of $75 million to $120 million. Beginning in September 1997,
      the Company will be required to pledge approximately $44
      million of cash or marketable securities as collateral for its
      obligation under the terms of the Company's operating lease
      for certain of its facilities in California. The lease expires
      in September 1999.
           In addition to the Company's working capital as of August
      31, 1995, which includes cash and cash equivalents of $90.0
      million and short-term investments of $58.6 million, the Company
      also has available a $100 million unsecured domestic revolving
      credit facility, subject to financial covenants and
      restrictions, and $33 million in available foreign credit
      facilities. During the fourth quarter of fiscal 1995, nearly
      80% of the Company's outstanding zero-coupon subordinated
      notes were voluntarily converted to common stock. The result
      of these conversions was to decrease long-term debt by $113.9
      million, decrease other assets by $3.0 million (unamortized
      debt issuance costs), and increase common stock by $110.9
      million.
      
      
      ITEM 8:   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
      The information required by item 8 of form 10-K is presented
      here in the following order:

      Unaudited Quarterly Financial Information              
 
      Consolidated Balance Sheets                            
      Consolidated Statements of Income                      
      Consolidated Statements of Shareholders' Equity        
      Consolidated Statements of Cash Flows                  
      Notes to Consolidated Financial Statements             

      Independent Auditors' Report                           
      

      
      Unaudited Quarterly Financial Information

      For each fiscal quarter during the two fiscal years ended
      August 31,
                              (in thousands, except per share data)
                     First Quarter Second Quarter Third Quarter Fourth Quarter
      1995
      Net sales          $506,678      $471,266      $516,892       $570,723
      Gross profit       $ 45,443      $ 46,369      $ 52,379       $ 57,639
      Gross margin           9.0%          9.8%         10.1%          10.1%
      Operating income   $ 28,721      $ 28,419      $ 31,917       $ 34,377
      Operating margin       5.7%          6.0%          6.2%           6.0%
      Net income         $ 18,194      $ 18,034      $ 20,328       $ 22,970
      Primary net
       income per share  $   0.43      $   0.43      $   0.48       $   0.48
      Fully diluted net
       income per share  $   0.38      $   0.38      $   0.42       $   0.45
     
      1994
      Net sales          $321,840      $327,208      $365,083       $442,648
      Gross profit       $ 32,879      $ 34,768      $ 38,585       $ 40,096
      Gross margin          10.2%         10.6%         10.6%           9.1%
      Operating income   $ 19,168      $ 20,267      $ 23,697       $ 25,218
      Operating margin       6.0%          6.2%          6.5%           5.7%
      Net income         $ 11,890      $ 12,375      $ 14,690       $ 16,590
      Primary net
       income per share  $   0.28      $   0.29      $   0.35       $   0.39
      Fully diluted net
       income per share  $   0.26      $   0.27      $   0.31       $   0.35
      
      
      
      Consolidated Balance Sheets

      As of August 31, (in thousands)                     1995         1994

      Assets
      Current assets:
        Cash and cash equivalents                       $ 89,959     $ 67,906
        Short-term investments                            58,643       94,070
        Accounts receivable, less allowances
          of $3,501 and $2,459, respectively             254,898      188,794
        Inventories                                      298,809      232,389
        Prepaid expenses and other current assets         24,049       18,977
      Total current assets                               726,358      602,136

      Net property and equipment                         203,609      147,822
      Other assets                                        10,888       16,437
      Total assets                                      $940,855     $766,395
      
      Liabilities and Shareholders' Equity
      Current liabilities:
        Current portion of long-term debt and
          capital lease obligations                     $  4,796     $  3,149
        Accounts payable                                 310,680      241,930
        Accrued employee compensation                     28,705       21,598
        Accrued expenses                                  15,264       16,257
        Other current liabilities                         11,310        9,999
      Total current liabilities                          370,755      292,933
     
      Long-term debt and capital lease obligations        30,043      140,709
      Other long-term liabilities                          1,916        1,964
      Total liabilities                                  402,714      435,606
      
      Shareholders' equity:
        Preferred stock, no par value; 1,200
          shares authorized; no shares issued               ---           ---
        Common stock, no par value; 80,000 shares
          authorized; 49,584 and 41,302 shares
          issued and outstanding, respectively           329,265      206,257
        Retained earnings                                206,321      126,795
        Cumulative translation adjustment and other        2,555       (2,263)
      Total shareholders' equity                         538,141      330,789
      
      Commitments
      
      Total liabilities and shareholders' equity        $940,855     $766,395
      
      See accompanying notes to consolidated financial statements.
      
      
      
    Consolidated Statements of Income

    (in thousands, except per share data)
    Years ended August 31,                     1995        1994       1993
    Net sales                              $2,065,559  $1,456,779   $836,326
    Cost of sales                           1,863,729   1,310,451    737,458
      
    Gross profit                              201,830     146,328     98,868
    Operating expenses:
      Selling, general and administrative      73,554      53,816     41,965
      Research and development                  4,842       4,162      3,763
    Operating income                          123,434      88,350     53,140
     
    Interest income                             6,611       6,484      6,051
    Interest expense                           (9,551)    (10,675)   (10,578)
    Income before income taxes                120,494      84,159     48,613
      
    Income taxes                               40,968      28,614     18,013
    Net income                               $ 79,526    $ 55,545   $ 30,600
      
    Net income per share:
      Primary                                  $ 1.82      $ 1.32     $ 0.80
      Fully diluted                            $ 1.62      $ 1.18     $ 0.75
    Weighted average number of shares:
      Primary                                  43,773      42,205     38,132
      Fully diluted                            52,582      52,033     47,816
    
    See accompanying notes to consolidated financial statements.
      
      

    
  Consolidated Statements of Shareholders Equity
  
                                                     Cumulative
                           Common  Common            Translation      Total
                            Stock  Stock   Retained  Adjustment   Shareholders'
  (In thousands)           Shares  Amount  Earnings   and Other      Equity
    
Balances as of 8/31, 1992    32,988 $63,595   $40,650    $  ---      $104,245
Proceeds from public
  offering, net               6,644 127,566     ---         ---       127,566
Options exercised               881   2,028     ---         ---         2,028
Stock issued under employee
  purchase plan                 123   1,740     ---         ---         1,740
Tax benefit associated with
  exercise of stock options     ---   2,810     ---         ---         2,810
Net income                      ---    ---     30,600       ---        30,600
Cumulative translation
  adjustment and other          ---    ---      ---       (8,009)      (8,009)
 
Balances as of 8/31, 1993    40,636 197,739    71,250     (8,009)     260,980
Options exercised               527   3,601     ---         ---         3,601
Stock issued under employee
  purchase plan                 126   2,697     ---         ---         2,697
Conversion of long-term debt     13     174     ---         ---           174
Tax benefit associated with
  exercise of stock options     ---   2,046     ---         ---          2,046
Net income                      ---    ---     55,545       ---         55,545
Cumulative translation 
  adjustment and other          ---    ---      ---        5,746         5,746
      
Balances as of 8/31, 1994     41,302 206,257  126,795     (2,263)      330,789
Options exercised                573   7,858    ---          ---         7,858
Stock issued under employee
  purchase plan                  131   2,901    ---          ---         2,901
Conversion of long-term debt   7,578 110,915    ---          ---       110,915
Tax benefit associated with
  exercise of stock options      ---   1,334    ---          ---         1,334
Net income                       ---    ---    79,526        ---        79,526
Cumulative translation
  adjustment and other           ---    ---     ---         4,818        4,818
      
Balances as of 8/31, 1995     49,584 $329,265 $206,321    $ 2,555     $538,141
      
  See accompanying notes to consolidated financial statements.
      


      
   Consolidated Statements of Cash Flows

   Years ended August 31, (in thousands)             1995     1994      1993

 Cash flows from operating activities:
   Net income                                     $ 79,526  $ 55,545  $ 30,600
   Adjustments to reconcile net income
    to net cash provided by operating activities:
     Depreciation and amortization                  61,416    45,708    26,381
     Interest accretion on zero-coupon
      subordinated note                              8,240     8,894     8,235
     Other                                           3,763     2,349     1,745
     Changes in operating assets and liabilities:
       Accounts receivable                         (64,906)  (51,870)  (82,192)
       Inventories                                 (63,654)  (66,221)  (97,383)
       Prepaid expenses and other current assets    (4,566)   (6,470)   (5,243)
       Accounts payable                             63,681    65,283   116,778
       Accrued expenses and other
        current liabilities                          3,223    12,689    21,625
  Net cash provided by operating activities         86,723    65,907    20,546
   
  Cash flows from investing activities:
    Purchases of short-term investments           (183,299) (338,192) (391,824)
    Sales and maturities of short-term
     investments                                   218,805   380,335   319,574
    Purchases of facilities, equipment,
     and other assets                                ---     (14,383)  (55,215)
    Capital expenditures                          (113,613)  (58,959)  (68,286)
    Other                                             (426)   (1,998)     (950)
  Net cash used in investing activities            (78,533)  (33,197) (196,701)
      
  Cash flows from financing activities:
    Proceeds from bank lines of credit               4,366     ---       ---
    Repayments of long-term debt and
     capital lease obligations                      (3,484)   (8,864)   (7,245)
    Net proceeds from sale of common stock          10,759     6,298   131,334
  Net cash provided by (used in) financing
   activities                                       11,641    (2,566)  124,089
   
  Effect of exchange rate changes on
   cash and cash equivalents                         2,222     2,530    (1,208)
   
  Net increase (decrease) in cash and
   cash equivalents                                 22,053    32,674   (53,274)
  Cash and cash equivalents at beginning of year    67,906    35,232    88,506
  Cash and cash equivalents at end of year        $ 89,959  $ 67,906  $ 35,232
      
  Supplemental Disclosures
   Cash paid:
    Interest                                        $  482  $  1,242  $  2,436
    Income taxes                                    44,429    25,551    10,552
   Non-cash investing and financing activities:
    Issuance of common stock upon conversion
     of long-term debt                             110,915       174     ---
    Tax benefit associated with exercise of
     stock options                                   1,334     2,046     2,810
    New equipment acquired under long-term debt      ---       ---       1,800
    Debt incurred to purchase facilities,
     equipment, and other assets                     ---       ---       3,640
     
 See accompanying notes to consolidated financial statements.
      
      
      
      
      
      Notes to Consolidated Financial Statements      

      
      Note 1    Summary of Significant Accounting Policies
      (a)  Description of Operations and Principles of Consolidation
      Solectron Corporation (the Company) is an independent provider
      of customized manufacturing services to original equipment
      manufacturers in the electronics industry and operates in this
      one industry segment. The Company's primary services include
      materials procurement, materials management, and the
      manufacture and testing of printed circuit board assemblies.
      Other manufacturing services include systems assembly,
      flexible cable assembly, disk duplication, and packaging. In
      addition, the Company provides pre-manufacturing services,
      such as consultation on product design and manufacturability,
      and post-manufacturing services, including fulfillment, repair
      and refurbishment, upgrades, and end-of-product-life
      manufacturing. The Company's services include turnkey
      services, where the Company procures certain or all of the
      materials required for product assembly, and consignment
      services, where the customer supplies the materials necessary
      for product assembly. Turnkey services include material
      procurement and warehousing in addition to manufacturing, and
      involve greater resource investment than consignment services.
      The Company has manufacturing operations located in the United
      States, Europe, and Asia.
           The accompanying consolidated financial statements
      include the accounts of the Company and its subsidiaries after
      elimination of intercompany accounts and transactions.
      (b)  Cash Equivalents and Short-Term Investments
      Cash equivalents are highly liquid investments purchased with
      an original maturity of less than three months.
           The Company adopted Statement of Financial Accounting
      Standards (SFAS) No. 115, "Accounting for Certain Investments
      in Debt and Equity Securities," effective September 1, 1994.
      Under the provisions of SFAS No. 115, the Company has
      classified its investments in debt securities as "available-
      for-sale." Such investments are recorded at fair value, as
      determined from quoted market prices, and the cost of
      securities sold is determined based on the specific
      identification method. Unrealized gains and losses are
      included in shareholders' equity. Adoption of SFAS No. 115 did
      not have a material effect on the Company's consolidated
      financial position. See Note 2.
      (c)  Inventories
      Inventories are stated at the lower of weighted average cost
      or market. See Note 3.
      (d)  Property and Equipment
      Property and equipment are recorded at cost. Depreciation and
      amortization are computed based on the shorter of the
      estimated useful lives or the lease terms of the respective
      assets, using the straight-line method. Estimated useful lives
      are presented below. See Note 4.
           Machinery and equipment  2 - 5 years
           Equipment recorded under capital lease  3 - 5 years
           Furniture and fixtures   3 - 5 years
           Leasehold improvements   Lease term
           Buildings 6 - 50 years
           The Financial Accounting Standards Board recently issued
      SFAS No. 121, "Accounting for the Impairment of Long-Lived
      Assets and for Long-Lived Assets to Be Disposed Of." This
      statement requires long-lived assets to be evaluated for
      impairment whenever events or changes in circumstances
      indicate that the carrying amount of an asset may not be
      recoverable. The Company will adopt SFAS No. 121 on September
      1, 1996 and does not expect its provisions to have a material
      effect on the Company's consolidated results of operations in
      the year of adoption.
      (e)  Other Assets
      Other assets include debt issuance costs associated with the
      outstanding zero-coupon subordinated notes described in Note 6
      and goodwill related to the purchase of facilities and
      equipment described in Note 13. Debt issuance costs are
      amortized using the effective interest rate method over the
      debt term (20 years). Goodwill is amortized using the straight-
      line method over ten years.
      (f)  Income Taxes
      As described in Note 9, the Company adopted SFAS No. 109,
      "Accounting for Income Taxes," effective September 1, 1993.
      The adoption of SFAS No. 109 did not have a material effect on
      the Company's consolidated results of operations.
      (g)  Net Income Per Share
      Primary net income per share is computed using the weighted
      average number of common shares and dilutive common equivalent
      shares outstanding during the related period. Common
      equivalent shares consist of stock options which are computed
      using the treasury stock method. Fully diluted net income per
      share assumes full conversion of the Company's outstanding
      zero-coupon subordinated notes.
      (h)  Revenue Recognition
      The Company recognizes revenue upon shipment of product to
      its customers.
      (i)  Foreign Currency
      Assets and liabilities of foreign subsidiaries where the local
      currency is the functional currency are translated at year-end
      exchange rates. The effects of these translation adjustments
      are reported as
      a component of shareholders' equity. Exchange gains and losses
      arising from transactions denominated in a currency other than
      the functional currency of the entity involved and
      remeasurement adjustments for foreign operations where the
      U.S. dollar is the functional currency are included in income.
      To date, the effect on income of such amounts has been
      immaterial.
      (j)  Derivatives
      Gains and losses on foreign currency forward exchange
      contracts designated as hedges of assets and liabilities are
      included in income concurrently with the offsetting losses and
      gains on the related balance sheet item. See Note 7.
      (k) Year-End
      The Company's financial reporting year consists of either 52-
      or 53-week periods ending on the last Friday in August. Fiscal
      years 1993, 1994, and 1995 each contained 52 weeks; however,
      fiscal year 1996 will contain 53 weeks. For purposes of
      presentation in the accompanying financial statements and
      notes thereto, the Company has indicated its accounting years
      as ending on August 31.
        
      Note 2    Cash, Cash Equivalents, and Short-term Investments
      Cash, cash equivalents, and short-term investments consisted of
      the following:

                                               Cash and Cash     Short-term
      As of August 31, 1995 (in thousands)      Investments      Equivalents
     
      Cash                                         $32,050        $    ---
      Money market funds                            41,342             ---
      Certificates of deposit                       11,909            7,944
      U.S. government securities                      ---            11,225
      Municipal obligations                          3,000           39,474
      Other                                          1,658             ---  
      Total                                        $89,959          $58,643
      
      
          As of August 31, 1995 unrealized gains and losses were
      not material. All of the Company's short-term investments
      mature within two years, except certain municipal obligations
      which have stated maturities greater than nine years. For
      these securities, the Company has the option of adjusting the
      respective interest rates or liquidating these investments at
      face value on stated auction dates at intervals up to 180
      days.
     
      Note 3    Inventories
      Inventories consisted of:

      As of August 31, (in thousands)                  1995             1994

      Raw materials                                 $206,221          $164,817
      Work-in-process                                 92,588            67,572
      Total                                         $298,809          $232,389
      

      Note 4    Property and Equipment
      Property and equipment consisted of:
 
      As of August 31, (in thousands)                  1995             1994
     
      Land, buildings and improvements              $ 36,100          $ 29,686
      Equipment recorded under capital leases           ---              1,235
      Machinery and equipment                        261,702           165,212
      Furniture and fixtures                          36,296            27,517
      Leasehold improvements                          15,923            12,398
      Construction-in-progress                           908             2,049
       Total                                         350,929           238,097
      Less accumulated depreciation
       and amortization                              147,320            90,275
      
      Net property and equipment                    $203,609          $147,822
      
           Accumulated amortization on equipment under capital
      leases was $1,235,000 as of August 31, 1994. The related
      amortization expense is included in depreciation expense in
      the accompanying consolidated financial statements.
      
      Note 5    Lines of Credit
      The Company has $100 million available under an unsecured
      domestic revolving line of credit expiring June 30, 1997,
      which, at the Company's option, currently bears interest at either
      the bank's prime rate, the London interbank offering rate
      (LIBOR) plus 0.8%, or the bank's certificate of deposit rate
      plus 0.8%. As of August 31, 1995 and 1994, there were no
      borrowings under this line of credit. The agreement contains
      certain financial covenants; limits new indebtedness, business
      acquisitions, and repurchases of the Company's common stock,
      and prohibits the payment of cash dividends. The agreement
      also stipulates that if the Company pledges any cash, cash
      equivalents, or short-term investments, the amount of
      available borrowing under this line
      of credit will be reduced.
           The Company also has $37 million in foreign lines of
      credit and other bank facilities. Borrowings are payable on demand.
      The interest rates range from the bank's prime lending rate to
      the bank's prime rate plus 2.0%. As of August 31, 1995,
      borrowings under these lines of credit were $4.4 million and
      are included in other current liabilities in the accompanying
      consolidated financial statements.
          
      Note 6    Long-Term Debt
      Long-term debt and capital lease obligations consisted of:
     
      As of August 31, (in thousands)                1995            1994
     
      Zero-coupon subordinated notes
       due 2012, convertible into
       1,973 and 9,551 shares of
       common stock, respectively                   $30,043        $135,848
      Term loans, bearing interest at rates
       ranging from 7.2% to 12%
       due serially until June 1996;
       secured by equipment                           1,054           4,205
      Other                                           3,742           3,805
      Total long-term debt and
       capital lease obligations                     34,839         143,858
      Less current portion of long-term debt
       and capital lease obligations                  4,796           3,149
      
     Total Long-term debt                           $30,043        $140,709
      
           In May 1992, the Company issued 460,000 zero-coupon
      subordinated notes at an initial issue price of $252.57 per
      note. These notes have a maturity value of $1,000 each payable
      on May 5, 2012. The Company is accreting the issue price to
      the maturity value using the effective interest rate
      (approximately 7%). The notes are subordinated to all existing
      and future senior indebtedness of the Company. Each note is
      convertible at any time by the holder into 20.792 shares of
      common stock. Notes may be redeemed by the holder on
      May 5, 1997, 2002, and 2007 for a per note purchase price
      of $356.28, $502.57, and $708.92, respectively. The Company,
      at its option, may pay the purchase price on any of these
      redemption dates in cash or common stock, or any combination
      of both. Beginning on May 5, 1996, the notes are redeemable
      for cash at the option of the Company, in whole or
      in part, at redemption prices equal to the issue price plus
      accrued original issue discount through the date of
      redemption. The indenture governing the zero-coupon
      subordinated notes contains cross-default provisions. The
      market price of these notes, based on a market transaction on
      August 22, 1995, was $734 per note. During fiscal 1995,
      364,457 notes were voluntarily converted by the holders of the
      notes into 7,577,802 shares of common stock. If these
      conversions had occurred at the beginning of fiscal 1995,
      primary net income per share for fiscal 1995 would have been
      $1.67.

      Note 7    Financial Instruments
      (a)  Fair Value of Financial Instruments
      The fair value of the Company's cash, cash equivalents,
      accounts receivable, and accounts payable approximates the
      carrying amount due to the relatively short maturity of these
      items. The fair value of the Company's short-term investments
      and long-term debt is determined based on quoted market prices
      (see Notes 2 and 6).
      (b)  Derivatives
      The Company enters into forward exchange contracts to hedge
      foreign currency exposures on a continuing basis for periods
      consistent with its committed exposures. The Company's hedging
      transactions are considered non-trading and do not involve
      speculation. These transactions do not subject the Company to
      risk of accounting loss because gains and losses on these
      contracts offset losses and gains on the assets, liabilities,
      and transactions being hedged. The Company is exposed to
      credit-related losses in the event of nonperformance by the
      parties in these contracts. The amount of unrealized gain at
      risk was immaterial as of August 31, 1995. The Company had
      $77.0 million and $38.0 million of net foreign currency
      forward exchange contracts outstanding at the end of fiscal
      years 1995 and 1994, respectively, primarily for
      the purchase of European currencies.
      (c)  Business and Credit Concentrations
      Financial instruments which potentially subject the Company to
      concentrations of credit risk consist of cash, cash
      equivalents, short-term investments, and trade accounts
      receivable. The Company's cash, cash equivalents, and short-
      term investments are managed by recognized financial
      institutions which follow the Company's investment policy. The
      Company's investments are comprised of investment grade short-
      term debt instruments, and the Company's investment policy
      limits the amount of credit exposure in any one issue.
      Concentrations of credit risk result from sales to major
      customers as discussed in Note 12. The Company generally does
      not require collateral for sales on credit. The Company
      closely monitors extensions of credit and has not experienced
      significant credit losses in the past.

      Note 8    Commitments
      The Company leases various facilities under operating lease
      agreements. The facility leases expire at various dates
      through 2000. Substantially all leases require the Company to
      pay property taxes, insurance, and normal maintenance costs.
      All of the Company's leases have fixed minimum lease payments
      except the lease for certain facilities in California.
      Payments under this lease are periodically adjusted based on
      LIBOR rates. This lease provides the Company with the option
      at the end of the lease of either acquiring the property at
      its original cost or arranging for the property to be
      acquired. The Company is contingently liable under a first
      loss clause for a decline in market value of the leased
      facilities up to $44.2 million in the event the Company does
      not purchase the property at the end of the five-year lease
      term. The Company must also maintain compliance with financial
      covenants similar to its credit facilities.
           Future minimum payments related to lease obligations are
      $9.4 million, $8.0 million, $7.0 million, $5.5 million, and
      $1.6 million in each of the years in the five-year period
      ending August 31, 2000.
           Rent expense was $10.8 million, $11.1 million, and $9.4
      million for the years ended August 31, 1995, 1994, and 1993,
      respectively.

      Note 9    Income Taxes
      The Company adopted SFAS No. 109 effective September 1, 1993.
      The cumulative effect of this change in accounting for income
      taxes was not material. Prior years' financial statements have
      not been restated to apply the provisions of SFAS No. 109.
           The components of income taxes are as follows:

      Years ended August 31, (in thousands)       1995      1994      1993
      
      Current:
       Federal                                   $34,922   $17,682   $11,569
       State                                       4,370     4,151     3,361
       Foreign                                     4,346     7,121     3,375
        total current                             43,638    28,954    18,305
      Deferred:
       Federal                                    (3,474)     (313)     (292)
       State                                          15       (67)      ---
       Foreign                                       789        40       ---
        total deferred                           $40,968   $28,614   $18,013
      
           The overall effective income tax rate (expressed as a
      percentage of financial statement income before income taxes)
      differs from the expected U.S. income tax rate as follows:
      
      Years ended August 31,                       1995       1994      1993
     
      Federal tax rate                             35.0%     35.0%     34.0%
      State income tax, net of
       federal tax benefit                          2.4       3.2       4.5
      Tax exempt interest                          (0.7)     (1.0)     (2.0)
      Income of foreign subsidiaries
       taxed at different rates                    (4.2)     (3.5)     (1.7)
      Other                                         1.5       0.3       2.2
      Effective income tax rate                    34.0%     34.0%     37.0%
      
           The tax effects of temporary differences that give rise
      to significant portions of deferred tax assets and liabilities
      are as follows:
      
      As of August 31, (in thousands)                     1995       1994
     
       Deferred tax assets:
       Accruals, allowances, and reserves              $ 10,326    $ 7,006
       State income tax                                     920        478
       Pre-operating costs                                  164        277
       Acquired intangible assets                           463         72
       Other                                                278        434
       Total deferred tax assets                         12,151      8,267
      
      Deferred tax liabilities:
       Plant and equipment                               (1,779)    (1,642)
       Other                                             (2,070)      (996)
      Total deferred tax liabilities                     (3,849)    (2,638)
      
      Net deferred tax assets                           $ 8,302    $ 5,629
      
           Based on the Company's historical operating income,
      management believes it is more likely than not that the
      Company will realize the benefit of the deferred tax assets
      recorded and, accordingly, has established no valuation
      allowance.
           Worldwide income before income taxes consisted of the
      following:
      
      Years ended August 31, (in thousands)        1995     1994     1993
      U.S.                                      $ 91,537  $54,241   $36,163
      Non-U.S.                                    28,957   29,918    12,450
      Total                                     $120,494  $84,159   $48,613
      
           The Company has not provided for U.S. federal and foreign
      withholding taxes on approximately $55.5 million of foreign
      subsidiaries' undistributed earnings as of August 31, 1995
      because such earnings are intended to be reinvested
      indefinitely. The amount of income tax liability that would
      result had such earnings been repatriated is approximately
      $9.2 million.
           The Company has a tax holiday in Malaysia that expires in
      January, 1997 subject to certain extensions.
      
      Note 10   Shareholders' Equity
      (a)  Stock Split
      On October 11, 1993 the Board of Directors approved a 2 for 1
      split of the Company's common stock effective October 27,
      1993. The consolidated financial statements have been
      retroactively adjusted to reflect the stock split.
      (b)  Stock Option Plans
      The Company's stock option plans provide for grants of options
      to employees to purchase common stock at the fair market value
      of such shares on the grant date. The options vest over a four-
      year period beginning generally on the grant date. The term of
      the options is five years for options granted prior to
      November 17, 1993 and seven years for options granted
      thereafter. A summary of stock option activity under the plans
      follows:
 
      Years ended August 31,            1995                     1994
      
                                Number of   Exercise     Number of   Exercise
                                 Shares      Price        Shares      Price
      Outstanding at
        beginning
        of year               4,067,143  $1.81-$30.75   2,923,526  $0.94-$23.69
      Granted                   778,250  26.63- 37.38   1,836,000  26.94- 30.75
      Exercised                (572,780)  1.81- 30.75    (526,629)  0.94- 27.31
      Canceled                 (280,773)  1.94- 37.38    (165,754)  1.94- 30.75
      Outstanding
       at end
       of year                3,991,840  $1.94-$37.38   4,067,143  $1.81-$30.75
      
      Exercisable
       at end
       of year                1,924,029  $1.94-$37.38   1,390,228  $1.81-$30.75
      
           A total of 7,188,395 shares of common stock remain
      reserved for issuance under the plans as of August 31, 1995.
           Each independent member of the Company's Board of
      Directors is granted 6,000 stock options each December 1 at
      the fair market value as of that date. Such options vest over
      one year.
      (c)  Employee Stock Purchase Plan
      Under the Company's Employee Stock Purchase Plan (the Purchase
      Plan), employees meeting specific employment qualifications
      are eligible to participate and can purchase shares quarterly
      through payroll deductions at the lower of 85% of the fair
      market value of the stock at the commencement or end of the
      offering period. The Purchase Plan permits eligible employees to
      purchase common stock through payroll deductions for up to 10%
      of qualified compensation. As of August 31, 1995, 1,529,981
      shares remain available for issuance under the Purchase Plan.
     
      Note 11   Business Segment Information
      Information about the Company's operations in different
      geographic regions is presented in the table below:

                                                    Operating  Identifiable
      (in thousands)                    Net Sales     Income      Assets
      Fiscal 1995
       United States                    $1,280,397   $ 94,078    $609,245
       Europe                              534,038     15,316     213,996
       Asia                                251,124     14,040     117,614
      Total                             $2,065,559   $123,434    $940,855
      
      Fiscal 1994
       United States                    $  945,742   $ 58,488    $485,854
       Europe                              389,257     22,286     201,262
       Asia                                121,780      7,576      79,279
      Total                             $1,456,779   $ 88,350    $766,395
      
      Fiscal 1993
       United States                    $  601,449   $ 40,908    $441,658
       Foreign (primarily Europe)          234,877     12,232     161,627
      Total                             $  836,326   $ 53,140    $603,285
      

      Note 12   Major Customers
      Net sales to major customers as a percentage of consolidated
      net sales were as follows:
      Years ended August 31,                1995       1994        1993
      IBM                                    21%        28%         26%
      Apple                                < 10%        12%       < 10%
      Sun Microsystems, Inc.               < 10%      < 10%         12%
          
      Note 13   Asset Acquisitions
      In September 1992, the Company purchased facilities and
      printed circuit board assembly equipment located in Charlotte,
      North Carolina and Bordeaux, France, from IBM for a purchase
      price of $58.9 million. In September 1993, the Company acquired
      similar operations in Dunfermline, Scotland and printed
      circuit board assembly equipment in Everett, Washington. In
      conjunction with these asset acquisitions, the Company also
      purchased inventory and hired certain employees associated
      with the assembly operations conducted at these sites.
           These acquisitions have been accounted for by the
      purchase method of accounting, and accordingly the purchase
      price has been allocated to the assets acquired based on
      estimated fair values at the date of acquisition. The excess
      of purchase price over the estimated fair values of the assets
      acquired has been recorded as goodwill, which is being
      amortized over ten years.
           On August 17, 1995, the Company executed definitive
      agreements with Hewlett-Packard GmbH (HP), a subsidiary of
      Hewlett-Packard Company, to acquire HP's printed circuit board
      assembly operation in Boeblingen, Germany. The transaction is
      expected to close in November 1995.
      
      The Board of Directors and Shareholders
      Solectron Corporation:
      We have audited the accompanying consolidated balance sheets
      of Solectron Corporation and subsidiaries as of August 31,
      1995 and 1994, and the related consolidated statements of
      income, shareholders' equity, and cash flows for each of the
      years in the three-year period ended August 31, 1995. These
      consolidated financial statements are the responsibility of
      the Company's management. Our responsibility is to express an
      opinion on these consolidated financial statements based on
      our audits.
           We conducted our audits in accordance with generally
      accepted auditing standards. Those standards require that we
      plan and perform the audit to obtain reasonable assurance
      about whether the financial statements are free of material
      misstatement. An audit includes examining, on a test basis,
      evidence supporting the amounts and disclosures in the
      financial statements. An audit also includes assessing the
      accounting principles used and significant estimates made by
      management, as well as evaluating the overall financial
      statement presentation. We believe that our audits provide a
      reasonable basis for our opinion.
           In our opinion, the consolidated financial statements
      referred to above present fairly, in all material respects,
      the financial position of Solectron Corporation and
      subsidiaries as of August 31, 1995 and 1994, and the results
      of their operations and their cash flows for each
      of the years in the three-year period ended August 31, 1995,
      in conformity with generally accepted accounting principles.
      KPMG PEAT MARWICK LLP
      San Jose, California
      September 8, 1995
      
      ITEM 9:   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
      ACCOUNTING AND FINANCIAL DISCLOSURE
      
      Not applicable
                                    
                                PART III
                                    
                                    
      ITEM 10:       DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT
      
      The Company's executive officers and directors and their ages
      as of August 31, 1995 are as follows:
      
      Name                           Age       Position
      
      Charles A. Dickinson (3)       71        Chairman of the Board,
                                               President Solectron Europe,
                                               and Director

      Koichi Nishimura,Ph.D.         57        President, Chief Executive
                                               Officer, and Director

      Stephen T. Ng                  40        Senior Vice President
                                               and Chief Materials Officer

      Leslie T. Nishimura            51        Senior Vice President
                                               and President Solectron
                                               Washington, Inc.

      Ken Tsai                       52        Senior Vice President
                                               and President Solectron Asia

      Susan S. Wang                  44        Senior Vice President,
                                               Chief Financial Officer,
                                               and Secretary

      Walter W. Wilson               51        Senior Vice President
                                               and President Solectron
                                               North America  

      Saeed Zohouri, Ph.D.           44        Senior Vice President
                                               and Chief Technology
                                               Officer

      Winston H. Chen, Ph.D.(3)      53        Director
      
      Richard A. D'Amore (1)         41        Director

      Kenneth E. Haughton, Ph.D.(3)  67        Director

      Paul R. Low, Ph.D. (2)(1)      62        Director

      W. Ferrell Sanders (2)         58        Director

      Osamu Yamada                   65        Director
     
      
      (1)  Member of the Audit Committee
      (2)  Member of the Compensation Committee
      (3)  Member of the Nominating Committee


            Mr. Charles A. Dickinson has served as a director of the
      Company  since 1984, and as Chairman of the Board of Directors
      from 1986 to 1990 and from 1994 to the present.  He served  as
      an  independent management consultant to the Company from 1991
      to  1993.  He served as President, Solectron France, S.A. from
      1992  to  1993  and has served as President, Solectron  Europe
      since  1993.  From 1986 to 1990, he was Chairman of the  Board
      of Directors, President and Chief Executive Officer of Vermont
      Micro  Systems,  Inc.,  a manufacturer of  microcomputer-based
      graphics cards.  He currently serves as a director of  Vermont
      Micro Systems, Inc.
      
           Dr. Koichi Nishimura has served as a director since 1991,
      Chief  Executive Officer since 1992 and President since  1990.
      He  was Co-Chief Executive Officer from 1991 to 1992 and Chief
      Operating  Officer  from 1988 to 1991.   From  1964  to  1988,
      Dr.  Nishimura was employed by International Business Machines
      Corporation  ("IBM")  in  various  technology  and  management
      positions.  He also serves as a director of Merix Corporation,
      a   manufacturer   of   technologically  advanced   electronic
      interconnection products.
      
            Mr.  Leslie  T.  Nishimura  is  President  of  Solectron
      Washington,  Inc. and has served as Senior Vice  President  of
      the  Company since 1989, President of Solectron Asia from 1991
      to  1993, Secretary of the Company from 1989 to 1992 and  Vice
      President, Manufacturing Technology of the Company  from  1978
      to  1989.   Mr. Nishimura's prior experience includes  various
      materials,   production   control   and   inventory    control
      supervisory  positions at Ritter Co., Burndy  Corporation  and
      the Norden Division of United Technologies, Inc.
      
            Ms. Susan S. Wang has served as Secretary of the Company
      since  1992  and  Senior Vice President  and  Chief  Financial
      Officer  of  the Company since 1990.  She was Vice  President,
      Finance  and Chief Financial Officer of the Company from  1986
      to  1990  and Director of Finance of the Company from 1984  to
      1986.   Prior  to joining the Company, Ms. Wang  held  various
      accounting and finance positions with Xerox Corporation.   Ms.
      Wang also held accounting and auditing positions with Westvaco
      Corp.  and  Price Waterhouse & Co.  She is a certified  public
      accountant.
      
            Mr.  Walter W. Wilson has served as President, Solectron
      North  America  since  September  1995,  President,  Solectron
      California  Corporation  since  March  1992  and  Senior  Vice
      President  of the Company since 1990.  From 1989  to  1990  he
      served as an operational Vice President of the Company.   From
      1965  to  1989 Mr. Wilson was employed by IBM in manufacturing
      and  product  development.  During his  IBM  tenure,  he  held
      management  positions in the United States, West  Germany  and
      Japan.
      
            Mr.  Ken  Tsai is President of Solectron  Asia  and  has
      served as Senior Vice President of the Company since May 1995,
      Vice President of the Company from 1990 to 1995.  He served as
      Director  of Manufacturing for the Company from 1989  to  1990
      and in various manufacturing and other positions from 1984  to
      1989.   Prior to joining Solectron, Mr. Tsai served in various
      management   and  business  planning  positions  at   American
      Cyanamid Company from 1968 to 1984.
      
            Dr.  Winston  H.  Chen has served as a director  of  the
      Company  since 1978, Chairman of the Board from 1990 to  1994,
      President from 1979 to 1990, Chief Executive Officer from 1984
      to  1991, and as Co-Chief Executive Officer from 1991  through
      1992.   Dr.  Chen  is  currently  Chairman  of  the  Paramitas
      Foundation.   From  1970 to 1978, Dr. Chen served  as  Process
      Technology and Development Manager of IBM.  He also serves  as
      a director of Intel Corporation, Megatest Corporation, SCEcorp
      and Paramitas Investment Corp.
      
            Mr.  Richard A. D'Amore has served as a director of  the
      Company since 1985.  Mr. D'Amore has been a general partner of
      various   venture   capital  funds  affiliated   with   Hambro
      International  Venture Funds since 1982 and a general  partner
      of  North Bridge Venture Partners since 1992.  He also  serves
      as a director of Math Soft, Inc. and VEECO.
      
            Dr. Kenneth E. Haughton has served as a director of  the
      Company  since 1985. Dr. Haughton is currently an  independent
      consultant.   From  1990  to 1991, he was  Vice  President  of
      Engineering  at  Da Vinci Graphics, a computer graphics  firm.
      From 1989 to 1990, Dr. Haughton was an independent consultant,
      and  from  1982  to 1989, he served as Dean of Engineering  at
      Santa  Clara  University.  He also serves  as  a  director  of
      Seagate Technology, a manufacturer of disk drives.
      
            Dr.  Paul R. Low has served as a director of the Company
      since  1993  and is currently the President of PRL Associates.
      Prior to founding PRL Associates, Dr. Low worked for IBM  from
      1957  to  1992.  Dr. Low held senior management and  executive
      positions   with   successively   increasing   responsibility,
      including  President,  General  Technology  Division  and  IBM
      Corporate  Vice  President;  President  of  General   Products
      Division;  and  General Manager, Technology Products  business
      line,  also serving on IBM's corporate management  board.   He
      also  serves as a director of Applied Materials, Inc.,  VEECO,
      Nexgen, and Number Nine.
      
            Mr.  W. Ferrell Sanders has served as a director of  the
      Company  since  1986.   Since 1987, Mr.  Sanders  has  been  a
      general partner of Asset Management Associates Venture Fund, a
      venture capital management firm.  From 1981 to 1987, he was an
      independent  management  consultant.   He  also  serves  as  a
      director of Adaptec, Inc.
      
            Mr. Osamu Yamada has served as a director of the Company
      since  1994.   Mr.  Yamada  is currently  an  advisor  to  The
      Mitsubishi Bank, Limited.  From 1990 to 1991, he was  Chairman
      and  Chief Executive Officer of BankCal Tri-State Corporation,
      a  wholly  owned  subsidiary of The Mitsubishi Bank,  Limited.
      From  1987  to  1990, he was Senior Managing Director  of  The
      Mitsubishi  Bank, Limited, and in an overlapping  period  from
      1985  to  1990,  he  was also Chairman,  President  and  Chief
      Executive  Officer of Bank of California.  Prior to  that,  he
      held  a number of key management positions with The Mitsubishi
      Bank, Limited  organization.  Mr. Yamada currently serves as a 
      director  of  PictureTel  and  on  number  of  boards of major
      universities and cultural centers.
      
            Mr. Stephen T. Ng joined Solectron in September 1989  as
      Vice President, Worldwide Material Purchasing and is currently
      Senior  Vice  President  and Chief Materials  Officer  of  the
      Company.   Prior  to joining Solectron, Mr. Ng  had  11  years
      experience in materials management in various capacities  with
      Xerox   Corporation.   His  last  position  prior  to  joining
      Solectron   was   Manager,  Material   Operations   at   Xerox
      Corporation.   Mr.  Ng  holds an MBA from  the  University  of
      Dallas and is a certified purchasing manager.
      
            Dr.  Saeed  Zohouri is Senior Vice President  and  Chief
      Technology  Officer  at  Solectron Corporation.   Dr.  Zohouri
      joined  Solectron  in  1980; he has  held  various  management
      positions and has also served as Director of Technology.   Dr.
      Zohouri  was  promoted to his current position in  1994.   His
      prior  experience  includes  teaching  chemistry  at  a  major
      international  university.   Dr. Zohouri  holds  a  master  of
      science degree in organic chemistry from Manchester University
      in  England and a doctorate degree in chemistry from  Stanford
      University.
      
           There is no family relationship among any of the
      foregoing individuals.
      
      
      
      ITEM 11: EXECUTIVE COMPENSATION
      
      The   information  required  by  item  11  of  Form  10-K   is
      incorporated by reference to the information contained in  the
      section  captioned  "Executive Officer  Compensation"  of  the
      Registrant's  definitive  Proxy Statement  (Notice  of  Annual
      Meeting of Shareholders) for the fiscal year ended August  31,
      1995 to be held on January 9, 1996 which the Company will file
      with  the  Securities and Exchange Commission within 120  days
      after the end of the fiscal year covered by this report.
      
      
      ITEM 12:  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
      MANAGEMENT
      
      Information  regarding  this item is  incorporated  herein  by
      reference  from  the section entitled "Security  Ownership  of
      Certain  Beneficial Owners and Management" of the Registrant's
      definitive  Proxy  Statement (Annual Meeting of  Shareholders)
      for the fiscal year ended August 31, 1995.
      
      
      ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
      
      Information  with respect to this item is incorporated  herein
      by  reference from the section entitled "Certain Transactions"
      of the Registrant's definitive Proxy Statement (Annual Meeting
      of Shareholders) for the fiscal year ended August 31, 1995.
      
      
                                 PART IV
                                    
                                    
      ITEM 14:  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
                ON FORM 8-K
      
      
      (a)  1.  Financial Statements. The financial statements
      listed in Item 8:  FINANCIAL  STATEMENTS  AND SUPPLEMENTARY
      DATA, above are filed as part of this Annual Report on Form
      10-K.
      
           2.  Financial Statement Schedules.  The financial 
      statement Schedule ii - VALUATION AND QUALIFYING ACCOUNTS is
      filed as part of this annual report in Form 10-K. 


           3.  Exhibits. The exhibits listed in the accompanying
      Index to Exhibits are filed as part of this Annual Report on
      Form 10-K.
      
      (b)  Reports on Form 8-K  
      During the  fiscal  quarter ended August 31, 1995 no current
      reports on Form 8-K were filed.


      

                               SIGNATURES
                                    
      Pursuant to the requirements of Section 13 or 15(d) of the
      Securities Exchange Act of 1934, the Registrant has duly
      caused this report to be signed on its behalf by the
      undersigned, thereunto duly authorized.
      
                                         SOLECTRON CORPORATION
                                         (Registrant)
      
      Date:  November 20, 1995             By /s/ Koichi Nishimura
                                           (Koichi Nishimura, President
                                           and Chief Executive Officer)
      
      Pursuant to the requirements of the Securities Exchange Act of
      1934, this report has been signed below by the following
      persons on behalf of the Registrant and in the capacities and
      on the dates indicated.
      
         Name                         Title                      Date 

            
                                 President, Chief Executive
/s/ Koichi Nishimura             Officer, and Director           11/20/1995
    Koichi Nishimura                                                 
                                                                 
                                 Chief Financial Officer                 
                                 (Principal Financial and  
                                 Accounting Officer), Senior             
/s/ Susan S. Wang                Vice President, and Secretary   11/20/1995  
    Susan S. Wang                                                    
                                                                 
                                 Chairman of the Board,   
                                 President Solectron Europe,
/s/ Charles A. Dickinson         and Director                   11/20/1995  
    Charles A. Dickinson                                             
                                                                 
/s/ Winston H. Chen              Director                       11/20/1995
    Winston H. Chen                                                  
                                                                 
/s/ Richard A. D'Amore           Director                       11/20/1995
    Richard A. D'Amore    
                                                                 
/s/ Kenneth E. Haughton          Director                       11/20/1995 
    Kenneth E. Haughton         
                                                                 
/s/ Paul R. Low                  Director                       11/20/1995      
    Paul R. Low                                                      
                                                                 
/s/ W. Ferrell Sanders           Director                       11/20/1995
    W. Ferrell Sanders                                               
                                                         
/s/ Osamu Yamada                 Director                       11/20/1995      
    Osamu Yamada
      
      
      
      
                 SOLECTRON CORPORATION AND SUBSIDIARIES
             SCHEDULE ii - VALUATION AND QUALIFYING ACCOUNTS
                            (in thousands)

                                         Amounts
                                         Charged
                           Balance at  (Credited)                Balance at
                           Beginning       To       Recoveries       End 
 Description               of Period   Operations  (Deductions)   of Period

 Fiscal 1993
 Allowance for doubtful
    accounts recievable     $1,010       $849            $3         $1,861

 Fiscal 1994                                                                 
 Allowance for doubtful     $1,861       $989         ($391)        $2,459
   accounts receivable                   
                                      
 Fiscal 1995                                      
 Allowance for doubtful
  accounts receivable       $2,459     $1,602         ($560)        $3,501
accounts receivable                   



                                                       
                                                                     
                            INDEX TO EXHIBITS
                                    
                                    
                                    
      Exhibit
      Number         Description
      
      3.1  [viii]    Articles of Incorporation of Company, as
                     amended
      3.2  [viii]    Bylaws of Company
      4.1  [ii]      Form of Certificate for Liquid Yield Option Notes
                     (LYONs)
      4.2  [ii]      Form of Indenture between the Company and
                     Bankers Trust Company, relating to the LYONs.
      10.1 [i]       Preferred Stock Purchase Agreement dated
                     September 29, 1983, together with amendments thereto
                     dated February 28, 1984 and June 23, 1988.
      10.2 [i]       Form of Indemnification Agreement between
                     Company and its officers, directors and
                     certain other key employees.
      10.3 [i]       Amendment to form of Indemnification Agreement.
      10.4 [iv]      1983 Incentive Stock Option Plan, as amended
                     August 13, 1991.
      10.5 [vi]      1988 Employee Stock Purchase Plan, as amended
                     October 1992.
      10.6 [v]       Amended and Restated 1992 Stock Option Plan.
      10.7 [iii]     Master Asset Transfer and Stock Purchase
                     Agreement dated August 17, 1992, as
                     amended, between Company and International Business
                     Machines Corporation.
      10.8 [vi]+     ECAT Manufacturing Agreement dated August 17, 1992,
                     between Company and International                 
                     Business Machines Corporation (the "ECAT Agreement").
      10.9 [vi]+     Amendment to the ECAT Agreement dated September 30, 1992
                     between Company and International Business Machines.
      10.10 [vii]    Stock Acquisition Agreement dated August 28, 1993,
                     between Company and Solectron California Corporation
      10.11 [vii]    Multicurrency Credit Agreement dated June 30, 1993,
                     between Company and Bank of America
                     National Trust and Savings Association as Agent and Issuing
                     Bank
      10.12 [viii]   Lease Agreement between BNP Leasing Corporation, as
                     Landlord, and Company, as Tenant, Effective
                     September 6, 1994.
      10.13 [viii]   Purchase Agreement, by and between Company and BNP
                     Leasing Corporation, dated September 6, 1994
      10.14 [viii]   Pledge and Security Agreement, by and between Company,
                     As Debtor, and BNP Leasing Corporation, as Secured
                     Party, dated September 6, 1994
      10.15 [viii]   Assignment and Assumption Agreement between Company and
                     Solectron California Corporation, dated November 9, 1994
      10.16 [viii]   Custodial Agreement by and between Company, Banque
                     Nationale De Paris, and BNP Leasing Corporation, dated
                     September 6, 1994
      10.17 [viii]   First Amendment to Multicurrency Credit
                     Agreement, dated August 29, 1994
      10.18 [viii]   Second Amendment to Multicurrency Credit
                     Agreement, dated September 30, 1994
      11.1           Statement re: Computation of Net Income Per Share.
      21.1           Subsidiaries of the Registrant
      23.1           Consent of Independent Auditors
      27.1           Financial Data Schedule


                     

                    INDEX TO EXHIBITS (Continued)
                                    
                                    
                                
      Footnotes             Description
      
      
      [i]            Incorporated by reference to the Exhibits to
                     Company's Registration Statement on Form S-1 (File No.
                     33-22840).
      [ii]           Incorporated by reference to the Exhibits to
                     Company's Registration Statement on Form S-1 filed
                     April 6, 1992 (Registration No. 33-46971).
      [iii]          Incorporated by reference to the Company's Form
                     8-K filed October 15, 1992.
      [iv]           Incorporated by reference to the Exhibits to
                     Company's Registration Statement on
                     Form S-8 (File No. 33-46686)
      [v]            Incorporated by reference to the Exhibits to
                     Company's Registration Statement on Form S-8, filed
                     Febuary 2, 1995 (File No. 33-75270)
      [vi]           Incorporated by reference to the Exhibits to
                     Company's Form 10-K for the year ended August 31, 1992
      [vii]          Incorporated by reference to the Exhibits to
                     Company's Form 10-K for the year ended August 31, 1993
      [viii]         Incorporated by reference to the Exhibits to
                     Company's Form 10-K for the year ended August 31, 1994
      
      
                +    Confidential treatment has been granted for
                     certain portions of these documents.

                            
                                                                Exhibit 11.1
      
                   SOLECTRON CORPORATION AND SUBSIDIARIES STATEMENT
                    REGARDING COMPUTATION OF NET INCOME PER SHARE
                       (in thousands, except per share data)


 Twelve months ended August 31,         1995       1994       1993             


 Weighted average number
 of common stock
 equivalents:     

 Primary: 
   Common stock                        42,861      41,023     36,698
   Common stock equivalents -       
     stock options                        912       1,182      1,434
                                       43,773      42,205     38,132

 Fully diluted:
   Common shares issuable upon
     assummed conversion of
     zero-coupon subordinated
     notes                             8,286       9,557       9,562
   Incremental increase in
     common stock equivalent
     options using end of
     period market price                 523         271         122
                                      52,582      52,033      47,816



 Net income                         $ 79,526    $ 55,545    $ 30,600
     
    Interest accretion on
    zero-coupon subordinated
    notes, net of taxes                5,439       5,944       5,283

    Net income - fully diluted      $ 84,965    $ 61,489    $ 35,883



 Net income per share - primary        $1.82       $1.32       $0.80

 Net income per share -
       fully diluted                   $1.62       $1.18       $0.75


                                                                           
                                                                           
                                                              Exhibit 21.1
      
                          SOLECTRON CORPORATION
                                    
                              SUBSIDIARIES
                                    
                                    
                                                Jurisdiction of
      Subsidiary                          Incorporation or Organization
      
      
      Solectron California Corporation             California
      
      Solectron Technology, Inc.                   California
      
      Solectron Washington, Inc.                   California
      
      Solectron France, S.A.                       France
      
      Solectron Scotland Limited                   Scotland
      
      Solectron Japan, Inc.                        Japan
      
      Solectron Technology SDN. BHD.               Malaysia




                                                             Exhibit 23.1

                     Consent of Independent Auditors


     The Board of Directors and Shareholders
     Solectron Corporation:

     We consent to incorporation by reference in the registration
     statements  (Nos. 33-75270, 33-58580, 33-46686 and 33-33461) 
     on Form S-8 of Solectron Corporation of our report dated 
     September 8, 1995, relating to the consolidated balance
     sheets of Solectron Corporation and subidiaries as of
     August 31, 1995 and 1994, and the related consolidated
     statements of income, shareholders' equity, cash flows for
     each of the years in the three-year period ended
     August 31, 1995, and related schedule, which report appears
     in the August 31, 1995, annual report on Form 10-K of Solectron
     Corporation. 




                                           KPMG Peat Marwick LLP


     San Jose, California
     November 16, 1995












                                                           Exhibit 27.1
_______________________________
TMTrademark of Merrill Lynch & Co., Inc.

EX-27

 

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<NAME> SOLECTRON CORP
       
                             
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