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Electronics Production | October 09, 2008

EMS distribution requirements can be challenging

A possible consolidation wave in the EMS industry would also mean fewer customers and declining revenue for many electronics distributors. But not all distributors see consolidation as a bad thing – in the long run.
Some distributors consider EMS as a growing portion of their business and a profitable EMS industry is in turn good for distributors and their business. However, distribution requirements differ greatly between OEM and EMS industry, states purchasing.com.

EMS providers have stringent requirements – due to their very small margins – and those companies can’t afford problems. Many distributors work with big EMS-providers, but a major part of their business also comes from smaller EMS companies. But these smaller EMS-providers have different requirements than Flextronics or Foxconn. Proportions – for one – is a big difference and those smaller EMS-providers are less volatile in manufacturing than large EMS providers, and business is more stable.

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