Electronics Production | May 12, 2008

EMS industry continued to grow at a double-digit rate in 2007

The worldwide electronic manufacturing services (EMS) industry grew at the annual rate of 17% in 2007, generating $268.1 billion in revenues, according to new research from IDC.

While the original design manufacturer (ODM) sector continued to grow at the higher rate of 23% in 2007, the EMS sector still accounted for more than 60% of the industry. The two largest product segments remained computers and consumer devices, generating 36% and 29% of the EMS industry revenue respectively in 2007. The regional revenue mix was also fairly stable in 2007 due the realignments U.S. EMS firms undertook to shift their geographic footprints offshore. "While computing remains the largest single sector, followed by consumer devices, the industrial segment experienced constant solid growth for EMS firms and displaced servers and storage as the third largest product segment for the industry," said Michael Palma, senior research analyst for IDC's Semiconductor group. "ODMs need to evaluate current product and customer portfolios, and look beyond notebooks and mobile phones for future growth. EMS and ODM firms should also take steps to mitigate effects from a likely U.S. recession." IDC's ranking of the top three EMS/ODM firms worldwide in 2007, based on revenue, is as follows: Foxconn maintained its lead in the market, with 16% of all industry revenues, growing by 46% from 2006. Flextronics grew to 12% market share as it acquired Solectron. Quanta enjoyed the strongest annual growth of 57%, based on its success in the notebook segment winning business from Apple and Dell.

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