U.S. contract manufacturing to triple, top $35 billion by 2001.MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--Nov. 3, 1995--The U.S. market for contract manufacturing will more than triple, ballooning from $11.1 billion in 1994 to $36.4 billion by the year 2001, growing at a 19 percent compound annual rate, projects a new study just released by Frost & Sullivan. The largest percentage of contract manufacturing business will continue to come from the computer industry, which accounted for 40 percent of total revenues in 1994 -- a figure that will rise to 41 percent in 2001 -- at the same time the telecommunications share rises from 19 to 21 percent and those of industrial and instrumentation fall from 14 to 12 percent, consumer and automotive products from 8 to 7 and military and aerospace industries from 6 to 3 percent, forecasts the report, U.S. CONTRACT MANUFACTURING SERVICE MARKETS: EMSI EMSI Ecole de Management des Systèmes d'Information EMSI Electro-Mechanical Systems International EMSI Electronic Manufacturing Services Industry EMSI Emergency Medical Services Instructor EMSI Executive Management Services, Inc. EMSI Expanded Multi-Sensor Integration BUILDING UPON A STRONG FOUNDATION. OEMs (original equipment manufacturers) are increasingly outsourcing almost every aspect of product manufacturing from design to final assembly. Contract manufacturers have become full-fledged partners in product design and development, and essentially extensions of the OEMs they service. Contract manufacturing will continue to grow in many cases faster than the industries it serves, benefiting contract manufacturers of all sizes. Contract manufacturing expanded in the recession of the early 1990s with downsizing (1) Converting mainframe and mini-based systems to client/server LANs. (2) To reduce equipment and associated costs by switching to a less-expensive system. (jargon) downsizing by many OEMs. With economic recovery, OEMs increased their reliance on contract manufacturers rather than investing in more capital equipment. Contract manufacturers meanwhile increased their production capabilities, investing in the latest technologies and expanding the services they could offer. The contract manufacturer, shared by multiple OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and clients, leverages the advantage of year-round full volume production. While the computer industry, for example, rises at Christmas and falls afterward with consumer demand, contract manufacturer lines remain busy producing for other industries, while the computer maker's exclusive lines would sit idle. Turnkey contracting is gaining ground vis-a-vis consignment contracting, although the latter will continue to be important, particularly benefiting smaller contract manufacturers who may be unable to source components in times of high demand or may not have the order size to be noticed by suppliers. As the demand for smaller and faster products has intensified, PCB PCB: see polychlorinated biphenyl. PCB in full polychlorinated biphenyl Any of a class of highly stable organic compounds prepared by the reaction of chlorine with biphenyl, a two-ring compound. assembling technology has shifted from through-hole to surface mount technology (SMT (1) (Surface Mount Technology) See surface mount. (2) (Station ManagemenT) An FDDI network management protocol that provides direct management. Only one node requires the software. SMT - Station Management ), allowing more processes to be automated, meaning higher volumes and lowering cost per board. Through-hole technology Through-hole technology, also spelled "thru-hole", refers to the mounting scheme used for electronic components that involves the use of pins on the components that are inserted into holes drilled in printed circuit boards (PCB) and soldered to pads on the opposite side. will remain important, however, in many applications due to its component attachment strength and ease of testing and repair. New PCB assembly technologies include tape automated bonding A process that places bare chips onto a printed circuit board (PCB) by attaching them to a polyimide film. The film is moved to the target location, and the leads are cut and soldered to the board. The bare chip is then encapsulated ("glob topped") with epoxy or plastic. See chip on board. (TAB), chip on board (COB), multi-chip modules A Multi-Chip Module or MCM is a specialized electronic package where multiple integrated circuits (ICs), semiconductor dies or other modules are packaged in such a way as to facilitate their use as a single IC. (MCMs) and ball grid array “BGA” redirects here. For other uses, see BGA (disambiguation). A ball grid array (BGA) is a type of surface-mount packaging used for integrated circuits. (BGA (Ball Grid Array) A popular surface mount chip package that uses a grid of solder balls as its connectors. Available in plastic and ceramic varieties, BGA is noted for its compact size, high lead count and low inductance, which allows lower voltages to be used. ). Industry growth makes contract firms prime acquisition targets. At the same time, it provides incentives for new industry entrants, although on balance the number of independent companies in the business is projected to slowly shrink. Frost & Sullivan, a subsidiary of Market Intelligence, is an international high-technology research firm specializing in industrial and information technologies. All Frost & Sullivan reports are based on extensive interviews with marketing and technical experts from selected companies in each market segment. Primary research is validated by thorough analysis of available secondary research. Frost & Sullivan is the leading publisher worldwide of high-technology market research reports. -0- Code: 5285-25 Publication Date: November 1995 Price: $ 2395 CONTACT: Frost & Sullivan Amy Arnell, 415/961-9000 (Mountain View) Kristina Menzefricke, 44-171-730-3438 (London) Nadge Keryhuel, 33-1-4742-9127 (Paris) |
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