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17
August
2007

Not only low labour costs in South East Asia

The EMS industry in South East Asia is turning into a high technology EMS hub, according to Joe Tang, Senior VP of Southeast Asia Operations, Solectron Corp.
Not any more is the South East Asian EMS industry about low-cost, low-tech manufacturing. This region is becoming a prime EMS hub, says Joe Tang.

“The electronics manufacturing services (EMS) market in Southeast Asia is undergoing a metamorphosis. Many OEM and EMS companies traditionally viewed the region as the low-cost answer for high-volume, low-complexity products, such as computers and mobile phones. It is different today. Southeast Asia's engineering and supply chain talent—as well as its modern infrastructure—is drawing companies like Solectron Corp., which is capitalizing on the region's evolution to service its customers", Joe Tang wrote in a chronicle.

Joe Tang named some key aspects and driving factors for the South East Asian region:
• Access to a high-quality, lower-cost supply base;
• Proximity to consumers in fast-growing, emerging markets;
• A service-oriented workforce with a strong work ethic, mature technical and management skills, deep product knowledge and understanding of complex business processes;
• English as a common language;
• Greater political stability;
• Rising labor costs in other Asia-Pacific countries;
• Dynamic end-customer requirements dictating the need for manufacturing and supply chain speed, flexibility, competitive cost and quality.

In a table Joe Tang made a comparison between several companies in terms of disadvantages and advantages:

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