More EMS providers to move to India
Jim Carbone, Executive Editor, Electronics, Purchasing Magazine -- Purchasing, 7/28/2005 2:00:00 AM
Buyers looking to find a new low-cost manufacturing location should look closely at India. India's contract manufacturing business is expected to nearly triple in revenue over the next five years, according to a new study. Revenue generated by electronics manufacturing services (EMS) providers and original design manufacturers (ODMs) in India will rise from $774 million in 2004 to $2.03 billion in 2009, says researcher iSuppli. More EMS and ODMs will locate in India to take advantage of low labor rates, a fast-growing domestic market, an excellent education system, the nation's technology parks and the recent improvements in the country's transit and utility infrastructure.
Despite the expected growth in the next five years, the Indian contract manufacturing industry will not threaten China's position as preferred global location for electronics manufacturing. India's contract manufacturing activities will primarily serve the nation's indigenous demand. In the longer term, however, India may compete with the Chinese providers in select products as the nation's share of the global electronics market increases. Using contract manufacturing services in India can help OEMs penetrate the local market. Buyers can expect many of their electronics suppliers to set up shops in India to support the burgeoning EMS industry in that market.
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