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Electronics Production | November 13, 2009

Regional footprint for EMS continues to move to Asia

Matt Chanoff, Chief Economist at InForum, described both TAM and electronics outsourcing to return to annualized growth of 5% in the next 12-24 months following an estimated 9% contraction for 2009.

InForum sized the total available market for the electronics manufacturing industry at $1.3T in 2008, estimates it to retract to $1.2T in 2009, and predicts growth to reach $1.4T by 2013. The EMS industry was sized at $127B in 2008, estimated to retract to $103B in 2009, and forecast to grow to $127B again by 2013. The ODM industry was sized at $116B in 2008, $107B for 2009, and forecasted to grow to $135B by 2013. A major influence on this year’s forecast was the manner in which InForum treated the revenues for Foxconn, which for the first time were not all included in the EMS sector, but broken out between the EMS and ODM industries. Mr. Chanoff identified the industry segments with the greatest outsourcing growth potential in this area to include automotive, medical and aerospace and defense. “Forecasting isn’t a perfect science,” commented Mr. Chanoff, “but I’m proud of our track record. We also make a point of being very transparent about our approach, and we focus on giving clients a broader picture, so that they can keep an eye on important growth drivers, integrate our forecasts into their internal planning processes, and improve their own forecasting.” Eric Miscoll, Sr. Analyst and contributing member of the InForum Forecasting team, stated that the regional footprint for electronics manufacturing continues its shift towards Asia, although somewhat less aggressively than in past years. This shift is still mainly driven by the search for low cost labor, readily available capacity. "Mitigating the shift to Asia is the rising cost of labor in China, OEM insourcing, and greater consideration of Total Cost of Ownership in outsourcing decisions", he continues in saying. Image Source: Wilson
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