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Emerging Economies Offer Lucrative Migration Opportunities for EMS Providers Notes Frost & Sullivan - Electronic manufacturing service (EMS) outsourcing will continue to be impacted by three conspicuous factors, namely, providing support for OEM base, servicing local end markets, and identifying low-cost manufacturing options
Emerging Economies Offer Lucrative Migration Opportunities for EMS Providers Notes Frost & Sullivan

 

PRZOOM - /newswire/ - Mountain View, CA, United States, 2009/05/07 - Electronic manufacturing service (EMS) outsourcing will continue to be impacted by three conspicuous factors, namely, providing support for OEM base, servicing local end markets, and identifying low-cost manufacturing options.

   
 
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However, other considerations that include easy access and availability of local engineers during product conceptualization, development, and integration stage gain importance as well. EMS providers explore new arenas, going beyond the cost parameter, which was, until now, the primary reason for migration.

New analysis from Frost & Sullivan (smt.frost.com), EMS Provider Regional Migration Opportunities, finds that EMS providers and OEMs will continue to invest in low-cost regions and thereby exploit growing economies.

If you are interested in a virtual brochure, which provides a brief synopsis of the research and a table of contents, send an email to David Escalante, Corporate Communications, at david.escalante[.]frost.com, with your full name, company name, title, telephone number, company email address, company website, city, state and country. Upon receipt of the above information, a brochure will be sent to you by email.

“An evolutionary process is unfolding within the EMS outsourcing strategy, and regionalization is proving to be a smart decision while balancing the need for migrating toward low-cost regions,” says Frost & Sullivan Senior Research Analyst Lavanya Rammohan. “With the emerging hybrid model of regionalization and keeping high volume manufacturing at low-cost regions, EMS providers have the opportunity to capitalize on new economies.”

As innovation, cost, and time to market become hyper competitive, EMS providers strive hard to find better outsourcing options that provide competitive benefits as well as create value for customers. Trends point to a migration away from China to India, Vietnam, Ukraine, Romania, Poland, the Czech Republic, Brazil, North Africa, and the Middle East.

The focus is on exploring new economies, increasing service destinations, and maintaining brand repute. Economic stability, lower wages, and substantial local market potential have put Eastern Europe, Asia, Russia, and Brazil in the spotlight, not in terms of high volume production alone, but also for the manufacture of high-tech products.

Additionally, the escalating demand for R&D and the availability of technological expertise make conditions ideal for the evolving role of EMS-OEM partnership. The level of R&D and design expertise in countries such as India, Singapore, Malaysia, Thailand, Vietnam, and Indonesia will propel these countries higher up the value chain.

The availability of support software, especially in India is another noteworthy advantage, acting as a precursor for sparking interest in passive electronics manufacturing. Robust economic growth, development of infrastructure, higher levels of education, and government benefits are triggering a growth spurt in emerging regions as the next hot outsourcing destinations.

Although the pace of transition toward the new hubs has been rapid, the lack of a structured component base, absence of a uniform infrastructure, and economic volatility has curtailed prospective EMS investment.

“Having borne challenges such as dealing with communication across various time zones and expensive logistics costs, EMS providers are carefully considering proximity to end markets as well as low cost manufacturing,” says Rammohan. “However EMS providers have to contend with challenges of under-developed infrastructure, logistics, and component supply base in most of the targeted outsourcing regions.

Overall, EMS providers expect changes in the market as OEMs and contract manufacturers grow weary of the complications of time-consuming transition of projects, increased logistics costs, and greater time to market. EMS providers are reorienting themselves to balance low-cost options with opportunities for renewed growth and profitability.

Participants in this space must idealize outsourcing as a business proposition that can enhance profitability as well as drive performance. Besides, complete solutions and products must be offered along with the necessary software for support and maintenance.

EMS Provider Regional Migration Opportunities is part of the Surface Mount Technologies Growth Partnership Service program, which also includes research in the following markets: EMS supply chain markets, opportunities for EMS providers in the North American automotive industry, EMS opportunities in the North American aerospace and defense industry, SMT screen printers and glue dispenser markets, and SMT software markets. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best in class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best practice models to drive the generation, evaluation and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 35 offices on six continents.

EMS Provider Regional Migration Opportunities / N4F9

 
 
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Emerging Economies Offer Lucrative Migration Opportunities for EMS Providers Notes Frost & Sullivan

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