By Adam Pick, iSuppli Electronics Production | November 20, 2007
Electronic Manufacturing Capacity Undergoes Global Rebalancing
In the early 2000’s, manufacturing capacity abruptly shifted from the high-cost regions of North America and Western Europe to the low-cost nation of mainland China. However, in the second half of the decade, iSuppli Corp. is tracking a new series of evolutionary and strategic steps for electronics contract manufacturers that focuses on other factors beyond labor cost when it comes to selecting a location for production.
That said, the regional diversification by electronics manufacturers can be attributed to other China-centric factors including a mobile workforce, inflation, taxes and the rising costs of transportation due to soaring oil prices. Ultimately, the emphasis has greatly shifted from labor costs only to the total cost of ownership, which considers managerial resources, organizational structuring, manufacturing competencies, intellectual property and, of course, logistics. A quick analysis of the recent capacity expansions announced by leading Electronic Manufacturing Service (EMS) providers, Original Design Manufacturers (ODMs) and OEMs reveals a number of new trends impacting the global electronics manufacturing business. Table 1: Reported EMS/ODM Capacity Expansions, 2005-2007 The first trend is the rising penetration of emerging regional economies, a factor that continues to be critical for many EMS and ODM providers. As iSuppli has been reporting for several years now, India’s domestic market has attracted Foreign Direct Investment (FDI) by several leading providers including Foxconn, Flextronics and Jabil. More recently, however, Russia has become a focal point for electronics manufacturers. While television specialist Vestel A.S. has been building its ODM/Own Brand Manufacturing (OBM) presence in Russia for some time, Foxconn Electronics Inc. in August announced a $50 million investment in the nation to build data-processing systems for Hewlett-Packard Co. The second trend is that proximity to large, local markets with fast-growing product segments appears to be critical to ODMs. This is particularly true for firms seeking to establish Liquid Crystal Display-Television (LCD-TV) manufacturing for Western European distribution. Wistron Co. Ltd. and Quanta Computer Inc. recently established capacity in Eastern Europe to build flat-panel sets for OEMs including Sharp Electronics Corp. and Hewlett-Packard Co. The ODMs’ local presence in the region helps minimize tariff costs throughout the European Union. Third, OEMs appear to be looking to diversify their manufacturing profile. That said, the rise of Vietnam as an alternative, low-cost manufacturing zone with both skilled and unskilled labor has attracted EMS providers, ODMs and OEMs during the past 18 months. It’s no secret that North American and Western European manufacturing capacity has been significantly downsized over the past 10 years. During the past six years, Solectron, Celestica, Sanmina and Elcoteq have shut down 38 facilities across North America and Western Europe. However, the surprise is that all this manufacturing did not only go to China—but also to other regions that have a strong allure for EMS providers and ODMs. iSuppli’s Electronics Manufacturing Capacity Database tracks the footprints (by region, country, city, square feet) of the Top-10 EMS providers, the Top-10 ODMs and the Top-30 OEMs. The database also provides EMS/ODM forecasts for each of the key global regions and emerging markets. For more information on the Electronics Manufacturing Capacity Database, please visit: http://www.isuppli.com/catalog/l3_emso.asp?sr=emso&se=206 Adam Pick is a principal analyst for EMS/ODM market intelligence services at iSuppli Corp. You may reach him directly at email@example.com.
IPC: Unanimous approval of USMCA needed IPC issued a statement this week expressing support of the recently bi-partisan approval of the United States-Mexico-Canada Agreement (USMCA), and a strong desire for legislative approval by Canada, Mexico, and the U.S.
Nordson's CFO to retire in 2020 after 30 years with the company Nordson's Executive Vice President and Chief Financial Officer, Gregory A. Thaxton, plans to retire in 2020 after thirty successful years with the company, with the last 12 years as CFO.
KUKA restructures subdivision due to economic uncertainty KUKA is restructuring a subdivision in the Robotics segment that is responsible for automated manufacturing solutions such as cells and special machines.
PCB industry recovers slightly in Q3 PCB manufacturers in the D/A/CH region were able to increase sales sequentially in the third quarter of 2019 by 1.1%. However, sales figures are 11% lower than those recorded for the third quarter of 2018, reports the industry association ZVEI PCB and Electronic Systems.
Garz & Fricke moves into new HQ in Hamburg-Harburg Garz & Fricke GmbH continues to expand. As of late October, the business operations of the HMI and Panel PC specialist will be transferring to the new headquarters in in Hamburg-Harburg.
TF Massif Technologies taps new CEO British Columbia-based TF Massif Technologies has announced the appointment of Tom Peregoodoff as the company’s new chief executive officer.
DoJ: Google, Fitbit deal under review The U.S. Justice Department is looking into anti-trust issues concerning Google's bid to buy Fitbit Inc.
L3Harris Tech secures U.S. Marine Corps order L3Harris Technologies received a USD 50 million follow-on delivery order for Falcon III AN/PRC-160 HF radios and related equipment from the U.S. Marine Corps .
Metair completes Romanian lithium-Ion battery cell factory South African energy storage company, Metair Investments, says that its Romanian units Prime Batteries and Rombat have completed the installation of the group's first Lithium-Ion battery cell manufacturing and assembly facility in Bucharest, Romania.
£5m award marks ‘topping out’ of Cardiff research powerhouse An GBP 80 million Cardiff University powerhouse for Welsh scientific research has been ‘topped out’ by Bouygues UK – backed by over GBP5 million support from Welsh Government and industrial partners.
Advanced Energy expands with new lab near Frankfurt Advanced Energy Industries, Inc. has opened its Advanced Materials Processing (AMP) Showcase Lab near Frankfurt, Germany.
TTM Technologies unveils NY engineering center On the heels of its acquisition of manufacturing and IP assets from i3 Electronics Inc., TTM Technologies has announced the opening of a new engineering center in Binghamton, NY.
EU Commission to support pan-European battery development Seven member states will provide, in the coming years, up to EUR 3.2 billion in funding to support research and innovation in the common European priority area of batteries.
The pulse of the electronics industry Growth is slowing worldwide and the industry’s outlook is less optimistic than in previous quarters, although it is still generally positive, according to the results of IPC’s fourth-quarter 2019 Pulse of the Electronics Industry survey.
Teradyne delivers J750 semiconductor test system to Ardentec Teradyne has hit a milestone with the 6,000th shipment of the J750 family of semiconductor testers.
Season Group names new SvP for global business development Season Group has appointed Stephen Tsao as the company's new Senior Vice President, Global Business Development.
Zestron appoints new sales director Europe Mr. Adam Meinert recently joined ZESTRON as the Sales Director of Europe.
Sypris Electronics tapped for NASA project Sypris Electronics LLC has been awarded a contract from Collins Aerospace in association with NASA’s Orion Spacecraft project.
NexLogic eyes implantable med-electronics NexLogic Technologies Inc. has announced its entry into assembly and manufacturing of implantable medical devices, a rapidly growing segment in the medical electronics market.
International Wire Group buys Owl Wire and Cable International Wire Group (IWG) has acquired New York-based Owl Wire and Cable from Marmon Holdings Inc.
ZF to set up third research and development centre in China ZF Friedrichshafen AG is establishing a third Chinese R&D centre in Guangzhou southern China. Representatives of ZF and the local authorities have signed an agreement and ZF plans to invest approximately EUR 90 million in the new development center.
Semiconductor market suffers another plunge in Q3 With revenue plunging by a gut-wrenching 14.7% in the third quarter, the global semiconductor market appears destined for a year of double-digit decline, despite some signs of growth in the critical memory segment, says IHS Markit.
Ericsson to pay $1B to resolve US corruption investigations Swedish telecom company Ericsson has reached a resolution on U.S. FCPA investigations by the the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC).
Bel acquires CUI Inc. power assets Bel Fuse Inc. has closed on its previously-announced deal with CUI Global for the majority of the power business of its subsidiary, CUI Inc.Load more news