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22
September
2010

EMS: Why Mexico is looking like a better venue than China?

While the Printed Circuit Board industry has seen positive gains through the first half of 2010, there are signs that the market may become tighter in the future.
Companies involved in the creation of circuit boards and semiconductors have posted tremendous gains in China, with electronic sales up over 50% when compared to 2009. However, China has recently taken steps to rein in growth, as the country tries to hold back inflation. This could be troublesome to the industry as reduced growth could lead to reduced sales, writes Wallstreet Equity Research.

While slowing growth may hurt sales in China, increasing wages in the country have sent many manufacturers like Flextronics looking elsewhere; namely Mexico. As wages increase in China, Mexico is being seen as a competitive alternative, as shipping cost to the U.S. is greatly reduced due to proximity. Some companies in the industry like Jabil Circuit have increased production from their Mexican plants and plan on further expanding business operations in the country.

Some companies in the industry like Jabil Circuit are also looking to diversify their clientele by expanding operations in various sectors. Companies have begun to aggressively go after healthcare and environmental alternatives markets, in an attempt to keep themselves well positioned in the ever changing market.
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