+ All Categories
Home > Education > Worldwide market and trends for electronic manufacturing services

Worldwide market and trends for electronic manufacturing services

Date post: 20-Jan-2015
Category:
Upload: studsplanetcom
View: 611 times
Download: 4 times
Share this document with a friend
Description:
Electronic Manufacturing Services
Popular Tags:
23
The Worldwide Electronics Manufacturing Market Presented by Randall Sherman NEW VENTURE RESEARCH CORPORATION A Market Research and Business Development Consultancy Nevada City, California
Transcript
Page 1: Worldwide market and trends for electronic manufacturing services

The Worldwide Electronics

Manufacturing Market

Presented by Randall Sherman

NEW VENTURE RESEARCH CORPORATIONA Market Research and Business Development Consultancy

Nevada City, California

Page 2: Worldwide market and trends for electronic manufacturing services

www.newventureresearch.com Page 2

Who is New Venture Research?

Specialists in contract manufacturing and outsourcing management

consulting services for more than 15 years

Produce syndicated research on the EMS industry through Electronic

Trend Publications that is the most widely quoted in the industry

- The Worldwide Contract Electronic Manufacturing Services Market

- The Worldwide Electronics Assembly Market

- Electronics Manufacturing in China

- The Worldwide Original Design Manufacturing Market

- The Worldwide Printed Electronics Market

- Nanotechnology Markets and Trends

- The Worldwide Solar Panel Assembly Market

Page 3: Worldwide market and trends for electronic manufacturing services

www.newventureresearch.com Page 3

The Worldwide Electronics Assembly Market

Cost of Goods Sold, ($B)

Segment 2007 2012 CAGR

Computer 298.6 408.3 6.5%

Communications 219.2 305.3 6.8%

Consumer 221.0 375.0 11.2%

Industrial/Medical 100.9 136.4 6.2%

Transportation 119.6 160.9 6.1%

Total 959.4 1385.9 7.6%

Page 4: Worldwide market and trends for electronic manufacturing services

www.newventureresearch.com Page 4

The Worldwide EMS Market by

Geographic Region

21.4%33.3 12.6 - Eastern Europe

13.8%Total 472.7247.3

9.8%14.8 9.3 Rest of the World

20.4%156.5 62.0 - China

17.0%328.8 149.8 Asia

8.3%60.1 40.4 Europe

19.8%33.1 13.4 - Mexico

7.6%69.0 47.9 North America

CAGR($B)($B)Rev. by Region

20122007

Page 5: Worldwide market and trends for electronic manufacturing services

www.newventureresearch.com Page 5

Worldwide EMS Direct Labor Statistics

1.12 China

1.25India

2.58 Taiwan

2.55 Mexico

3.25Hungary

6.12 Spain

7.70 Ireland

8.23 Japan

8.85 USA

9.03 England

10.67 Germany

Hourly Rate ($) Country

Page 6: Worldwide market and trends for electronic manufacturing services

www.newventureresearch.com Page 6

CM Industry - 1994-2004

EMS Revenue Growth ($B)

-

20

40

60

80

100

120

140

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

EM S Growth

Page 7: Worldwide market and trends for electronic manufacturing services

www.newventureresearch.com Page 7

CM Industry – 2005-2010

EMS Growth Estimate ($B)

-

50

100

150

200

250

300

350

2005 2006 2007 2008 2009 2010

Page 8: Worldwide market and trends for electronic manufacturing services

www.newventureresearch.com Page 8

Leading CM Companies in Mexico, 2007

Benchmark Electronics – Guadalajara

BenQ – Mexicali

Celestica – Monterrey, Querretaro

Elcoteq – Juarez, Monterrey

Flextronics – Aguacalientes, Guadalajara

Foxconn – Chihuahua

Jabil – Chihuahua, Guadalajara, Reynosa (2)

Plexus – Juarez

Sanmina-SCI – Apadoca, El Salto, Guadalajara (2), Monterrey

Solectron – Chihuahua, Guadalajara

Venture – Tijuana

Page 9: Worldwide market and trends for electronic manufacturing services

www.newventureresearch.com Page 9

Leading CMs in Eastern Europe, 2007

Benchmark Electronics – Romania

Celestica – Czech Republic, Romania

Elcoteq – Estonia, Romania, Russia

EPIQ – Bulgaria, Slovakia

Flextronics – Czech Republic, Hungary (2), Romania, Ukraine

Foxconn – Czech Republic (2), Hungary

Jabil – Hungary, Poland (2), Ukraine

NOTE – Lithuania, Poland

Sanmina-SCI – Hungary

SIIX – SlovakiaVideoton – Bulgaria

Zollner - Hungary

Page 10: Worldwide market and trends for electronic manufacturing services

www.newventureresearch.com Page 10

Leading CM Companies in China, 2007

Benchmark Electronics – Suzhou

Celestica – Dongguan, Shanghai, Suzhou

Elcoteq – Dongguan, Shenzhen, Beijing

Flextronics – Changzhou, Dongguan, Doumen (2) Nanjing,

Qingdao, Shajing, Shanghai (2), Shenzhen, Xixiang, Zhuhai

Foxconn – Beijing, Chongchang, Dongguan, Jinchang, Kunshan,

Shanghai, Shenzhen, Tianjin, Taiyuan, Yashou

Jabil – Beijing, Huangpu, Nanjing, Shanghai (2), Shenzhen,

Suzhou, Tianjin (2), Wuxi (2)

Sanmina-SCI – Kunshan, Shenzhen, Suzhou, Wuxi

USI – Shenzen, Shanghai

Venture – Shanghai (2)

Page 11: Worldwide market and trends for electronic manufacturing services

www.newventureresearch.com Page 11

New Industry Player: ODMs

ODM - Original Design Manufacturer (also called an Contract Design

Manufacturer – or CDM) is a Chinese/Taiwanese OEM offering ‘contract

manufacturer’ (CM) services in a specific product area which other OEMs

can private label.

OEM Customer ODM Supplier End Product

Dell/HP/IBM Quanta Computer Notebooks

Ericsson/Sony BenQ Cell phones

Cisco Systems HuaWei Low-end routers

ElectroLux Zhongyi Light appliances

Page 12: Worldwide market and trends for electronic manufacturing services

www.newventureresearch.com Page 12

Supplier Differences in Value-Add/Cost

Cost $

Development

OEMs

CMs

ODMs

Page 13: Worldwide market and trends for electronic manufacturing services

www.newventureresearch.com Page 13

Why OEM Customers Like ODMs

ODMs are low risk for OEMs because they no longer have to invest

in design, materials or inventory

ODM outsourcing is with an industry ‘expert’ in a specific product

area—not just a generic CM firm

ODMs are more attractive because they offer advanced designs, fresh

IP and the ability to bring a new product to market quickly

Page 14: Worldwide market and trends for electronic manufacturing services

www.newventureresearch.com Page 14

Why OEMs Dislike ODMs

A ODM partner may become an industry competitor after several years

once they gain the product design knowledge

Many Chinese companies have not standardized their business

practices with regard to accounting and legal. Very difficult to

pursue equitable solutions in courts

Because of a tendency to accept unhealthy profit margins many

ODMs are putting at risk their future survivability.

Page 15: Worldwide market and trends for electronic manufacturing services

www.newventureresearch.com Page 15

ODM Market Forecast, 2005-2010

ODM Growth Forecast ($B)

-

20

40

60

80

100

120

2005 2006 2007 2008 2009 2010

Page 16: Worldwide market and trends for electronic manufacturing services

www.newventureresearch.com Page 16

Chinese OEM/ODM Companies

Haier

Gree

Great Wall

Founder

Eastcom

Dongfeng

Desay

Datang

Dalian

Changhong

Changbai

BOE

Bird

Aucma

Amoisonic

SED

Putian

Peacock

Panda

Midea

Legend

Langchao

Konka

Kelon

Kejian

Kaifa

Jinling

Irico

Huawei

Huaqiang

Hisense

ZTE

Zhonghuang

Xiamen

Wandong

Utstarcom

Tongfang

Tiancai

TCL

SVA

Start Computer

Soutec

Skyworth

Shinco

Shangling

Shanghai Bell

SEG

Page 17: Worldwide market and trends for electronic manufacturing services

www.newventureresearch.com Page 17

Strengths of Manufacturing in Asia

• Cost Leader – 1/10 direct labor rate of USA – the lowest cost manufacturing region in the world

• Product Fit – High volume products that are price sensitive – computer motherboards, cell phones, low-end networking, consumer products

• Reliability – Most Chinese firms are viewed as reputable, with highly trained work forces. Stable wages, low inflation, good work ethic, high technical capability

• Quality – Not as high as OEMs would like (Six Sigma) but generally very good

Page 18: Worldwide market and trends for electronic manufacturing services

www.newventureresearch.com Page 18

Strengths of Manufacturing in

Mexico/Eastern Europe

• Cost Competitive– 1/5 direct labor rate of USA – the lowest cost manufacturing region in North America

• Product Fit – Best suited for low-to-medium volume products of higher complexity and mix – appliances, automotive, industrial, medical

• Reliability – Politically more attractive with longer history of doing business with the U.S. NAFTA/EC Commission a positive. Good technical skills and infrastructure

• Quality – Excellent, have fully embraced advanced manufacturing processes and systems– transparent to U.S/Europe.

Page 19: Worldwide market and trends for electronic manufacturing services

www.newventureresearch.com Page 19

Weaknesses of Manufacturing in Asia

• Intellectual Property – there have been examples of Chinese firms are going to steal designs and products to make knock-offs for domestic markets

• Government Red Tape – Customs, tariffs, inspectors can be a friend or enemy. Bribery is not an acceptable practice. There is favoritism to local firms and a weakness in the legal system.

• Honesty – OEMs have some bad experiences with firms promising things (volumes, quality, on-time delivery, parts, etc.) that they cannot deliver

• Capital – Chinese firms lack capital to invest in technology, equipment and advanced processes

Page 20: Worldwide market and trends for electronic manufacturing services

www.newventureresearch.com Page 20

Weaknesses of Manufacturing in

Mexico/Eastern Europe

• Inflation – wages are subject to regular increases and many government imposed benefits

• Costs – Power, telecommunications, transportation, wages could be more efficient and competitive

• Competition – Could be more competitive and industry focused. No apparent national priority. Electronics industry was theirs to lose

• Lack of Government Policy – Electronics industry lacks many supporting government policies and tax incentives that China has to improve competitiveness

Page 21: Worldwide market and trends for electronic manufacturing services

www.newventureresearch.com Page 21

Summary/Conclusion

- Market for EMS will remain expand vigorously – particularly in

low-cost regions for next 5 years

- Private ownership in socialist countries will grow over the next few years

creating a more capitalistic society

- Mexico may regain favored partner status if improvements are made

and China stumbles in its offering. Eastern Europe makes steady

progress.

- Competition will intensify among Chinese suppliers over time creating

a ‘feeding frenzy’ and over capacity

- All regions are eager to find good and long-term partners – incentives

make the difference

Page 22: Worldwide market and trends for electronic manufacturing services

www.newventureresearch.com Page 22

Conclusion

“It is not the strongest species that survive,

nor the most intelligent, but the ones most

responsive to change.”

Charles Darwin

Page 23: Worldwide market and trends for electronic manufacturing services

www.newventureresearch.com Page 23

NEW VENTURE

RESEARCH CORPORATION

A Business Research and Development Consultancy

Nevada City, California


Recommended