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Maintaining Profitability for EMS Providers in Tough World Market Conditions
Frost & Sullivan, Sep 2003
Non-traditional Markets Promise Fresh Opportunities for Providers
Though demand from traditional end users such as telecom, computing, consumer electronics, aerospace and defense is not forthcoming, due to high penetration levels, electronic manufacturing service (EMS) providers are expected to find huge rewards in targeting new opportunities in emerging markets. The current recession has also contributed to a reduction in electronic manufacturing contracts from global governments in the defense sector, thus causing a decline in demand. EMS providers need to explore options in nascent segments such as medical devices, biometrics, test and measurement devices, and automotive electronics, where manufacturers are increasing their outsourcing trends. Increasing marketing efforts in this direction will prove profitable for EMS providers.
This new research service from discusses strategies and market trends that can maintain profitability for EMS providers during tough market conditions. It covers opportunities in emerging markets over the forecast period. It also provides forecasts and trends for the total world market with revenue break-up by end user and geographic region. Percentage of revenue split by attachment type, total procurement, and services segments are provided in addition to information on the most common technologies being used in the industry.
Demand for New Applications that Use Electronic Devices Spurs Sales
Expanding and rapidly evolving segments, such as automotive, biotechnology, and healthcare are opening new opportunities for EMS providers. Automotive, medical, and biometric devices as well as consumer products such as cooking equipment and washing machines use electronic devices with embedded software.
Technologies, such as flat panel displays, smart cards, and dynamic random access memory (DRAM) chips have emerged as strong potential markets during the past two years, increasing demand for EMS providers, says the analyst of this research service. Biometrics is a highly promising area within which there is a huge potential for fingerprint sensors, iris recognition technology, and voice verification devices, among others, he adds. Since all these are usually outsourced on a massive scale, this is expected to positively affect sales turnover.
Expanding Industrial Base in China Sustains Growth Potential
Since China has a huge population apart from catering to a large portion of the Asian markets, it sustains a great demand for electronic products. These factors, coupled with the low penetration rate of computers, mobile phones, digital video disks (DVDs), digital cameras, and other consumer electronic products in China creates great sales potential for the EMS industry. The granting of licenses to third-generation (3G) mobile phone operators is expected to generate demand for 3G phones in China, thus improving prospects for EMS providers.
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