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Electronics Production | June 06, 2008

Western Europe continue to lose share of Global Electronics Production

Electronics manufacturing in the U.S., Japan and Western Europe accounted for under 50% of electronics output for the first time in 2006 as the migration of volume manufacturing to low cost locations continues.
Although the Asia-Pacific (and China in particular) has been the main beneficiary, Central and Eastern Europe and Mexico and Brazil have also benefited from significant inward investment. In the longer-term, many of today's low-cost locations will also offer significant market opportunities, creating the need for further investment in local manufacturing, according to from Electronics.ca Publications.

Between 1995 and 2006, Asia Pacific's share of global electronics production has increased from 20% to 42%. More importantly, during this period China's share of global electronics production has increased from 3% to 20.5% and transformed the structure of the global electronics industry.

Similar to the U.S. and countries in Western Europe, Japan is being impacted by the migration of production to low-cost locations. By the end of 2006, electronics output had fallen by 23.5% from the peak in 2000 and the country's share of global electronics output to 12.7% down from 26% in 1995. Despite the underlying trends, production stabilized in 2006 with production rising by 4.0% and by a modest 0.6% in 2007.

The outlook for the Indian electronics industry remains positive. Electronics production increased by 22% in 2006 and, although it is expected to ease slightly in both 2007 and 2008, it will still show double digit growth.

In 1995, Western Europe accounted for 21% of global electronics production. By 2000, this had fallen to 18% and in 2007 was estimated to be around 15%. Between 2000 and 2006 electronics output in Western Europe has fallen by an estimated 30% in local currency.

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