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Electronics Production | September 08, 2008

Defence sector to increase outsourcing

Traditionally, the defence sector is not a major player when it comes to outsourcing it manufacturing needs to EMS-providers. However, developments indicate that this is about to change.
Defence and Aerospace accounted for around $2.8 billion in the EMS-market in 2006. US-based market researcher Technology Forecasters predicts that this is going to increase to $4.4 billion by 2011.

The difference to ordinary EMS outsourcing practice is that the industry is not only working with the big players in the business. “Companies with under $200 million per year are doing military work,” Purchasing.com states. A major part in the outsourcing is printed circuit board assembly. Technology Forecasters found that board assembly, box build/system subassembly and cable assembly were most likely to be outsourced.

Additional to that, outsourcing has not developed into a business, but rather into a project strategy. An OEM company way outsource for one project, but retain manufacturing for another one.

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