Contract Manufacturing Industry Set to Undergo Slowdown PDF Print E-mail
Friday, 30 May 2008 08:01
EL SEGUNDO, CAiSuppli Corp. has trimmed its long-term growth forecast for global electronics contract manufacturing revenue to 8% during the 2006 to 2013 timeframe, down from its previous outlook of a 9.3% expansion.

“Reasons for the downgrade include the large combined size of the $305 billion electronics manufacturing services and original design manufacturing businesses, which make it difficult to achieve significant percentage growth in revenue,” said Adam Pick, principal analyst for EMS/ODM at iSuppli. “Furthermore, leading EMS provider Foxconn, which has driven much of the growth in the EMS segment of the contract manufacturing market, is beginning to undergo a deceleration. Finally, many EMS/ODM players are rethinking their strategy of pursuing market share expansion and are focusing on their competitive positioning and financial performance.”
 
Based on interviews with 25 leaders in each node of the contract manufacturing value chain – including OEMs, EMS, ODMs and component suppliers – iSuppli has evaluated the future of contract manufacturing. Several major themes have emerged: CM industrial structure transformation; OEM engagement models; EMS/ODM service offerings; component supplier strategies, and global capacity rebalancing.
 
“During the next five years, industrial forces will trigger an evolutionary transformation within the EMS/ODM marketplace,” Pick said. “Consolidation, OEM procurement strategies, alternative supplier theories, competitive collaboration networks, and new contract manufacturing strategies will affect the value chain.”
 
iSuppli will present a Webinar, EMS/ODM Transforms by 2013, on June 4 at 11:30 a.m. EST.
 
Last Updated on Friday, 30 May 2008 08:05
 

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