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EMS Reverses 2001 Decline
August 22, 2007 |Estimated reading time: 1 minute
SAN JOSE, Calif. The global EMS market brought in $223 billion in 2006, climbing 17% from 2005. The EMS sector also recorded substantially better profits than in any previous year, reversing a series of losses that began with the industry's 2001 downturn, reports Electronic Trend Publications (ETP). Trends toward outsourcing, migration to Asia manufacturing, and producing computer and communications equipment all continue into 2007, with adjustments forecast through 2011.
"The Worldwide Electronics Manufacturing Service Market, Fourth Edition," from ETP, profiles 90 EMS providers, analyses trends in regional and end-market production, and tracks the EMS and electronics manufacturing industries from 2006 to 2011. It predicts that the EMS sector will grow robustly, reaching $442 billion in 2011, outpacing the general electronics assembly industry. This suggests that companies continue to outsource more production to contract manufacturers (CMs) and EMS providers. Communications and medical EMS segments will expand over the next five years, followed by moderate growth in computers and defense products, which will benefit original design manufacturers (ODMs) in the communications and computing markets.
Asia production facilities manufactured about 54% of electronics in 2006; this is estimated to reach 67% by 2011. However, ETP finds that shifting assembly to lower-labor-cost regions is a slowing trend, as cost advantages are low when weighted against total cost of production. Migration to low-cost regions will continue at a more moderate pace in the forecasted future. Production in more expensive regions, such as North America and Europe, will decline somewhat by 2011, dropping to 16% and 14%, respectively, of the global market.
ETP ranks EMS providers by revenue and according to its proprietary system, which considers five-year revenue growth and net income improvement, revenue per square foot, debt ratio, and other factors. Hon Hai subsidiary Foxconn topped the 2006 revenue ranking, with more than double the market share of any other EMS company. Jurong took the top slot in ETP's rating system.
For the complete Fourth Edition report, contact the analysts at ETP.