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Electronics Production | September 17, 2007

Mechatronic systems targets by EMS industry

The EMS industry got its name in the business by building PCBs and then entire electronics systems for computer and communications OEMs. Those industries are still biggest customers for the EMS providers but now EMS providers are looking for more nontraditional industrial customers.
New interesting customers areas are ATMs, vending and electronic kiosk machines, semiconductor manufacturing and test equipment, factory-automation systems and other equipment that blend electronics and mechanical systems.

These segements is growing for the EMS providers who have set up business units or dedicated factories to service them.

There are no figures available yet for these segments since they are included in the industrial segment along with medical equipment and defense and aerospace. That will post nearly 12% compound annual growth through 2013 as it rises from $19.2 billion in 2006 to $29.2 billion, according to Adam Pick, at iSuppli.

According to Adam Pick "These systems are appealing to EMS providers because they have long lifecycles." "Lifecycles are not six months like a handset or a laptop. You're talking three to 20 years," he says. Margins are higher too.

Purchasing parts and materials for such systems poses sourcing challenges for EMS buyers. These segments requires a different supply base than computer or telecom products. The components and materials are more customized and many parts are single sourced.

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