Electronics Production | November 05, 2010

EMS revenues saw steep decline of 25% in 2009

The EMS industry's revenue declined 24.9% in 2009 from its all time historical high in 2008, the most pronounced decline in the past two decades, writes Lincoln International.
On an LTM 2010 basis, sales are still declining – the 18 largest publicly traded EMS-providers in the world produced a sales decrease of 4.4% versus the same period a year earlier. This represents only the second year since 2001 that showed a revenue decline year- over-year.

Overall EMS revenue during the last 12 months (LTM) has increased for Mid Tier and Small Tier EMS-providers and decreased for Large Tier and Micro Tier EMS-providers. Large EMS providers’ revenue declined 5.6% on an LTM 2010 basis versus a decrease of 25.6% in CY2009.

The Mid Tier has performed the best through 2010 with LTM revenue rising 6.3% relative to a decrease of 19.4% in CY2009. Small Tier EMS-companies’ also experienced positive growth, with an LTM 2010 revenue increase of 5.4% compared to a decrease of 10.1% in CY2009. The Micro Tier providers’ revenue declined 7.6% in LTM 2010 versus a 26.1% decrease in CY2009, the analyst company continues in its assessment.

Forecasts for the EMS-market have improved compared to last year. Longer term growth will continue to be driven by end markets. EMS- companies will see strong growth, with the medical, computer, and communications market segments leading the way.

In regards to long term growth, the medical end market offers the most significant growth potential. This end market is expected to grow at a CAGR of 14.3% from 2009 to 2014. The computer and communications sectors are also expected to show strong growth, both with a CAGR of 12.6% over the next five years.

Also showing double digit growth is the consumer industry with an expected CAGR of 12.2%, respectively, through 2014. From 2009 to 2014, the annual growth rates for the automotive, industrial and defense end markets are expected to be 9.3%, 8.8%, and 7.2% annually, respectively.

Overall, the global EMS market is expected to grow 12.2% annually from a USD 270 billion market in 2009 to a USD 479 billion market in 2014.


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