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                                                                    Exhibit 10.1

[SMTC Letterhead]

July 26, 2001

Frank Burke
112 Strath Avenue
Toronto, Ontario, M8X 1R5

Subject:  Offer of Employment

On behalf of SMTC Manufacturing Corporation of Canada (the "Company"), I am
pleased to offer you the position of Chief Financial Officer, on the following
terms and conditions:

      1.    Salary: The Company shall pay you a salary at the rate of
            Cdn$250,000 per year. Such salary shall be payable in bi-weekly
            installments of $9,615.39.

      2.    Executive Bonus Plan: You shall be paid in the first year of
            employment with the Company a guaranteed bonus of Cdn$250,000 paid
            in increments of 25% quarterly. Subsequent yearly bonuses shall be
            paid in increments of 25% quarterly based on targets mutually
            established over the first thirty days of employment. These targets
            shall be based on industry benchmarks and the Company internal
            goals, such as: (i) working capital metrics (net cash cycle); (ii)
            operating cash flow; (iii) profitability (EBITDA/EPS), etc., etc.

      3.    Signing Bonus: The Company shall pay you a guaranteed first year
            Signing Bonus of Cdn$100,000.

      4.    Stock Option Plan: You shall be granted 200,000 share options vested
            as follows:

            o     75,000 shares at the current stock price of the day this
                  agreement is signed vested over a period of twelve months

            o     25,000 shares at $5.00 strike price vested over a period of
                  four years

            o     50,000 shares at $8.00 strike price vested over a period of
                  four years

            o     50,000 shares at $12.00 strike price vested over a period of
                  four years

      5.    Change of Control: In the event of a Change of Control Transaction
            of the Company your stock options shall become fully vested and
            exercisable immediately prior to the Change of Control Transaction.
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      6.    Severance Agreement: Upon termination of your employment by the
            Company "Without Cause", you shall receive bi-weekly payments based
            on your annual salary for a period of one year beginning in the
            bi-weekly period following such termination. You shall also receive
            one year's bonus based on the previous twelve months performance.
            Such bonus shall be payable in four quarterly installments beginning
            in the first quarter following your termination. If termination
            should occur within the first twelve months of employment with the
            Company, the 75,000 initial share grant shall vest immediately.

      7.    Benefits: SMTC Employees Benefits Plans covers:

                  o     $15,000 of life insurance

                  o     $15,000 of AD&D insurance

                  o     Extended Health Care

                  o     Dental Care

                  The employee's contribution to the Plan is $20.87. SMTC offers
                  optional Long-term Disability coverage to its employees. The
                  employee pays the full premium for this benefit. SMTC also
                  offers optional family coverage of Extended Health Care and
                  Dental Care under its Benefits Plan at an additional cost of
                  $71.38 monthly, paid by the employee.

      8.    Vacation: Our standard vacation policy is four weeks vacation after
            one year of service.

We would like your employment to commence October 1, 2001 at which time you will
report to me. During your first day of employment our Human Resources will
discuss with you the Company Group Benefits Program for which you will become
eligible immediately.

Frank, I am delighted with your decision to accept employment with SMTC, and
hope that your experience here shall be a mutually gratifying one. Please sign
below and fax back to me via my private fax 905.479.9686 by August 7, 2001.

Yours truly,

/s/ Paul Walker
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Paul Walker
President & C.E.O.

PS: Enclosed with this Offer of Employment are two other documents, SMTC
Information Systems Policy and Code of Conduct Policy, for your signature.

I, Frank Burke, ACCEPT THIS OFFER OF EMPLOYMENT

/s/Frank Burke
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     SIGNATURE                                             DATE:  August 7, 2001


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