Global EMS market signals growth in 2014

As a result, the electronics industry and more importantly the EMS industry has to embrace these changes and adapt accordingly to remain competitive amongst its peers. In a evermore technologically advanced society businesses within the EMS sphere need to understand the fundamental challenges of coping with the continuous necessities for products to grow smaller, more compact and lightweight. In the past such issues were minor red flags, however, with today’s competitive market this calls for immense persistence in design and construction know-how in order to establish and implement innovative working processes, which in the long- run will reduce production time and rationalize expenditures. Due to a strong creative evolution where new concepts and schematics are constantly introduced into the market, creates for the establishment of brand new core and peripheral product families. Therefore, thinking out of the box in terms of manufacturing processes and going beyond the standard EMS service offerings are key pillars towards differentiating ones business outside of price and volume benchmarks. Another method of sustaining market dominance is through partnerships. Based on industry observations, a partnership both with competitors (geographic purpose) or through forward integration such as Flextronics and Jeep Cherokee or Electric Imp and Murata is a beneficial approach. Such partnerships allow for leveraging and realizing manufacturing benefits while simultaneously developing strong relationships with vendors and a grasp for market sentiments and industry production standards. Once again this can result in further improvement in overall product efficiency and quality while reducing costs for EMS players. Naturally this can also lead to an increase in orders from the partner organisation as well as competitors from the respective industry as they will typically seek competent EMS providers dealing with specific capabilities and references. The first quarter of 2014 reveals that growth within the EMS industry shall be evidently possible which will be driven by natural market forces. Nevertheless, the methods mentioned above can be added-value approaches that can create abnormal growth by certain EMS players. Market consolidation is a current topic that will be touched upon in next quarters newsletter as a fragmentation within the EMS value chain consisting of engineering, assembly and box build exists. An example of this can be noticed in the prospective acquisition of BuS Elektronik by Neways Electronics.