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Recovering Demand in End-Use Sectors to Drive the Global Market for Electronic Contract Manufacturing Services
Electronic contract manufacturing services (EMS) market comprises entities that offer manufacturing services to OEMs (Original Equipment Manufacturers) worldwide. Barring the recent recessionary period, EMS market has been one of the fastest growing industries in the area of electronic assembling. Companies in the industry have evolved over the years, emerging from providers of just manufacturing services for components to offering complex manufacturing services. This led to a substantial increase in amount of outsourced manufacturing operations from OEMs. Following a year of significant growth in 2010, which apparently was a result of a post-recession correction, the global EMS industry slowed down considerably in the year 2011. The decline in revenues was mainly triggered by the sovereign debt crisis in Europe and the slowdown in economic recovery in North America. Competition within the market continues to intensify, which has left tightened profit margins for players in the industry. The trend is more prominent in certain consumer product segments, making players operating in this space more vulnerable to such low-profit issues. Apparently, maintaining a more balanced target market portfolio is becoming increasingly decisive in determining player margins. With capacity additions coming to the fore and input costs rising, pricing is becoming a major concern for EMS providers in some target markets. Currently, the debt crisis in Europe continues to have a major impact on the electronic contract manufacturing market. With Europe representing an important market for electronic goods, immediate production cutbacks in the region are likely to have significant impact on the contract manufacturing sector. Against the backdrop of dampened business sentiments, credit restriction, and high labor costs, performance in the ECM market is expected to remain subdued for the near term.
Asia-Pacific represents the largest regional market for Electronic Contract Manufacturing Services worldwide, as stated by the new market research report on Electronic Contract Manufacturing Services. The region is also projected to remain the fastest growing regional market with a projected compounded annual growth rate of around 7% during the analysis period 2010-2018. Going forwards, China is expected to play a major role in the global EMS market. In part, this growth is expected to depend upon rising domestic consumption of final goods, as the country’s economy continues to surge at a rate faster than the developed markets in the West. Electronics manufacturing services (EMS) industry in the US continues to thrive, despite several Tier-I companies shifting manufacturing units to offshore locations. Medium and small sized domestic contract manufacturers are the most successful firms in the region offering superior quality and customer service.
Segment wise, Consumer Electronics represent the largest segment in the global Electronic Contract Manufacturing Services market. The segment witnessed a significant drop in revenues in 2009, led by low demand including semiconductors, mobile phone equipment and automotive sectors among others. Original Design Manufacturers, on the other hand, exhibited some resilience due to the strategy that focused on low-mix, high volume products such as motherboards, notebooks and PCs. The ODMs are likely to register better growth in the future, compared to contract manufacturers, due to the strength of their branded products that allows ODMs to sustain profitability. Besides, their increasing presence in rapidly growing markets such as mobile PCs and LCD TVs is expected to create substantial potential for these companies.
Major players profiled in the report Altadox, Inc., Celestica, Inc., Elcoteq Network Corporation, ESCATEC Sdn. Bhd, Flextronics International Ltd., Foxconn / Hon Hai Precision Industry Co., Ltd., Incap Oyj, Kitron ASA, Pegatron Corporation, and VTech Communications Ltd. Among others.
The research report titled “Electronic Contract Manufacturing Services: A Global Strategic Business Report” provides comprehensive market overview, trends & issues, recent industry activity and profiles of market players worldwide. Analysis and overview is provided for the years 2010 through 2018, for major geographic markets, such as US, Canada, Japan, Europe, Asia-Pacific, and Latin America. The study also provides historic data for an insight into market evolution over the period 2004 through 2009. Major end-use segments analyzed in the report include Consumer Electronics, Computers & Peripherals, Telecommunications, Industrial Electronics and Others.
Details of the new report, table of contents and ordering information can be found on Electronics.ca Publications' website. View the report: Electronic Contract Manufacturing Services: A Global Strategic Business Report.