Thursday, July 5, 2007
iSuppli Corp. this week reported that Vietnam has becomes the most prominent new “hot spot” for contract manufacturing. For years electronics contract manufacturers have headed to Chinese cities including Shenzhen, Guangzhou, Suzhou, Wuxi and Beijing, to maximize their revenues and minimize their costs. Indeed, iSuppli estimated that 52.4 percent of all contract-manufacturing revenues were generated by companies operating in China, including Foxconn, Flextronics, Quanta and Compal. However, Southeast Asia has emerged as a new hot spot in electronics manufacturing, with the firm pointing to Singapore, Malaysia, Thailand and, most notably, Vietnam. ISuppli has high expectations for the region, and reported that the Southeast Asian contract-manufacturing market, consisting of electronics manufacturing services (EMS) and original design manufacturing (ODM) providers, will rise to $24.9 billion by 2011, a nearly $9 billion increase from $16.2 billion in 2006. By 2011, Southeast Asia will rise to account for 7 percent of global electronics contract-manufacturing revenue, up from 6.3 percent in 2006, the firm predicted. “iSuppli believes that several factors are triggering this resurgent growth among Southeast Asia contract manufacturers, including a backlash against China,” said Adam Pick, principal analyst for EMS and ODM at iSuppli, in a statement. “OEMs are transforming their strategies given end-market demand and total landed costs. Needless to say, contract manufacturers are doing their best to manage those stated and latent needs.” Other factors include shifts in the competencies of EMS/ODM providers, iSuppli said, exampling that Singapore is no longer a low-mix, high-volume manufacturing hub but rather EMS providers have migrated up the value chain to offer higher margin services and builds. Government incentives also are playing a role in encouraging the migration of manufacturing to Vietnam and other regions, the firm noted.
By: DocMemory
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