EMS providers expand globally
By Jim Carbone -- Purchasing, 10/4/2007 2:37:00 PM
To grow revenue in a very competitive industry, many electronics manufacturing services providers are expanding to new countries or shifting their geographic footprint by opening new facilitities around the globe.
“China is always the epicenter, but there has been some shifting out of China,” says Adam Pick, principal analyst EMS/ODM, with researcher iSuppli in El Segundo, Calif. “There are capacity expansions by a number of providers in Vietnam and Malaysia by big guys like Flextronics and smaller guys like Plexus.”
He says in some cases Eastern Europe is being viewed as an alternative to Asia.
“We found that a number of industrial guys caught a bug and said ‘let’s go to Asia with our outsourcing. Now they are now saying ‘why did we do that.’ When you get to cultural differences, program management issues, time needed to travel back and forth with engineering teams, people have questioned whether it is worth it,” he says.
He says Western European EMS providers are extending capacity into Eastern Europe. “It’s a nice offering in terms of proximity to customers,” says Pick.
He says some original design manufacturers such as Wistron and Quanta are now bringing on capacity to service customers like Sharp and HP in Eastern Europe. EMS providers or ODMs have facilities in Hungary, the Czech Republic, Poland, Ukraine, Estonia, Turkey and Romania.
The bad news is that while EMS providers are expanding in Asia and Eastern Europe they are reducing their manufacturing footprint in North America.
“If you look at where big EMS guys are reducing capacity, 37 of them had plant reductions,” says Pick. “Of those 37, all of them are in Western Europe and North America.”
Also see EMS targets mechatronics systems
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