Worldwide EMS industry to recover.The worldwide electronics manufacturing services Electronic manufacturing services (EMS) is term used for companies that design, test, manufacture, distribute and provide return/repair services for electronic component and assemblies for original equipment manufacturers (OEMs). (EMS) industry is expected to decrease by $8 billion (7 percent) in 2001, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. a report released by market analysts IDC (Framingham, MA), However, according to the report. Contract Manufacturing Quarterly Update, CY 3Q01: Special Focus on the Taiwanese ODM/OEM Market, a slight gain of 7.5 percent is expected in this industry in the first quarter of 2002. "EMS revenue is near bottom, and overall growth is expected in the worldwide EMS market beginning in the first calendar quarter of 2002," said Kevin Kane, program manager for IDC's Contract Manufacturing Services research. "This growth will be fueled by a continued trend to outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. in the IT [information technology] industry coupled with improved global economic conditions." According to IDC, Selection will remain at the top of the industry, with 18 percent market share for calendar year 2001. Flextronics and Celestica are expected to follow Solectron, with 14 percent and 11 percent market share, respectively. This data represents an almost 3 percent year-over-year market share gain for Flextronics. Sanmina is expected to lose almost 2 percent market share in 2001 and fall out of the top five in the EMS industry. The Taiwanese original design manufacturer (ODM (Original Design Manufacturer) A contract manufacturer that uses its own designs and intellectual property (IP). See contract manufacturer. )/original equipment manufacturer (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 ) market is expected to remain flat at $20 billion in 2001. As with the EMS industry, IDC believes that ODM revenue has hit bottom and will begin to experience minimal growth in 2002. However, IDC expects that the ODM industry will show slower revenue growth relative to the EMS industry. Reasons for the expected slower ODM growth include fewer services offered, narrow product portfolio, limited customer base and the inherent risks of the ODM business model. According to IDC, Foxconn (22 percent) will hold the top spot slightly over Quanta quan·ta n. Plural of quantum. (17 percent) for 2001. This data represents an almost 7 percent market share increase for Foxconn and an almost 4 percent market share increase for Quanta in 2001, Cornel cornel: see dogwood. , with 11 percent; Inventec, with 9 percent; and FIC FIC First International Computer FIC Fogarty International Center (John E. Fogarty International Center for Advanced Study in the Health Sciences; National Institutes of Health) FIC Fellowship for Intentional Community , with 7 percent, are expected to round out the top five market share spots in the ODM industry. All three vendors lost market share on a year-over-year basis. Overall, IDC believes production is moving rapidly to the Asian region. Price pressures are forcing the industry to cut costs out of their manufacturing process, "China will become the Asian hub for low-cost manufacturing, and Taiwan will become the R&D and engineering expertise center for the region. EMS vendors and ODM vendors alike are expected to focus on mainland China as the next low-cost manufacturing region." Kane said. For more information on the report, contact Chery Toffel, IDC, ctoffel@idc.com. |
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