Electronics Production | May 28, 2009
Hungary counts for 60% of CEE market
Hungary has emerged as the largest electronics manufacturing market in CEE with a 60 per cent share of the CEE market.
Electronics assembly equipment vendors have witnessed double-digit growth rates in the central and eastern European (CEE) region, driving their overall top and bottom line profit margins. Multinational OEMs and EMS companies have started to invest heavily in upgrading their assembly lines as a substitute for the possible saturation of the qualified labour pool in the country and across the CEE region. Hungary has clearly emerged as the largest electronics manufacturing market in CEE with a staggering 60 per cent share of the CEE market. The country also houses the largest EMS market in CEE, which offers immense sales potential for capital equipment vendors. 'The growth of the Hungarian electronics markets has been fuelled primarily by the continuous migration of electronics manufacturers in search of labour intensive and low cost manufacturing locations that serve as production points for markets in the west,' note the analysts of a research made by Frost & Sullivan. 'Availability of low cost yet highly skilled labour force in Hungary, coupled with investment incentives from the government and economic funding from the European Union, has favoured the growth of the electronic manufacturing markets in the country.' Being one of the first central European countries to gain accession to the European Union, Hungary has seen a major increase in investments in the electronic manufacturing sector over the past few years. The country possesses one of the best component supplier bases in CEE and has a well-developed infrastructure in place. Further, investment incentives such as tax holidays and structural funds from the EU have made Hungary an attractive location for electronic manufacturing. Availability of Productive and Skilled Labour Force for Electronic Design Services Hungary has arguably one of the most innovative and productive skilled labour forces in the CEE region. In addition, during the past ten years the number of students receiving college degrees has more than doubled. Most of these graduates speak English and at least one other foreign language. The country's technological infrastructure is one of the most advanced in CEE.' Though the country has experienced a negative GDP growth rate from 2000 to 2007 due to heavy economic restructuring, investments in the electronic manufacturing markets have been growing steadily,' remark the analysts of this research. 'With competitive labour rates and a highly skilled labour force, Hungary is set to become central Europe’s next success story.' However, rising labour rates and increasing competition will restrain the growth of the market in the coming years. In addition, Hungary also faces competition from eastern European and Asian countries, which offer cheaper labour for manufacturing. As the competition from other east European countries intensifies, the average annual growth rate of the electronics manufacturing industry in Hungary is estimated to slow down. However, electronics manufacturers in the country have been investing in new production technologies and increasing the automation of manufacturing facilities. Besides, they are working in closer cooperation with end users to provide more effective and better quality services. This Frost & Sullivan research service titled Hungarian Electronics Manufacturing Markets provides an elaborate overview of the competitive landscape governing the electronics-manufacturing ecosystem in Hungary. Indicators such as market revenues for the original equipment manufacturers (OEM), electronic manufacturing service (EMS) and original design manufacturing (ODM) markets in Hungary along with a thorough analysis of key market drivers, restraints, and trends that are influencing this industry are included.
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