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Electronics Production | August 27, 2007

Forecast: Worldwide EMS market 2007–2011

The worldwide electronics manufacturing services (EMS) and original design manufacturing (ODM) industry grew to an estimated $237.7 billion in 2006 and should grow a further 12.2% in 2007 to $266.8 billion.
EMS firms earned $152.8 billion, nearly two-thirds of industry revenue in 2006; ODMs earned $84.9 billion. The EMS/ODM industry will achieve 9.6% compound annual growth rate (CAGR) from 2006 to 2011. At that point, revenue for the industry should reach $376.2 billion. Possible slower growth in the IT industry resulting from a slowing global economy and delays in emerging market penetration by EMS firms are among the factors that have led to lower its EMS industry forecast compared with its last forecast published in January 2007.

"Slowing commodity segments, nearshoring, and Asia/Pacific's already large share of ODM manufacturing are leading to the possible end of the large-scale offshoring movement as EMS firms try to reduce costs. From 2007, Asia/Pacific's share of EMS/ODM revenue is expected to hold steady," says Michael J. Palma, senior research analyst in IDC's EMS and Electronics Supply Chain program. "While taking longer to materialize than expected, growth in the second half of the forecast period from several emerging, industry-specific opportunities for EMS firms should help the EMS sector grow faster than Taiwan-based ODMs."

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