News


Demand for consumer electronics drives EMS market

1 October 2008 News

The electronics manufacturing service (EMS) market is highly dynamic, driven primarily by the consumer electronics and communications sectors.

EMS providers are also finding increased opportunities in niche markets such as the medical, industrial and aerospace and defence sectors.

In response to the growing competition levels in the industry, EMS providers are increasingly adopting innovative and strategic business models. These include better knowledge of customer needs, understanding the business models of customers/original equipment manufacturers (OEMs), effective communication tools, creating global footprints and focusing on core competencies.

New analysis from global growth consulting company Frost & Sullivan finds that the growing demand for consumer electronics will increase the outsourcing trend in the industry.

Increasing end-user demands, especially in the consumer electronics sector, and fast-paced technological developments pressure OEMs to continuously introduce new products into the market. Consequently, OEMs have to increasingly depend on EMS providers who offer significant benefits such as cost savings, reduced time-to-market, reduced time-to-volume, quality and flexibility. Leveraging the capabilities of EMS providers, OEMs can focus on research and development activities as well as sales and marketing strategies, while saving on capital investments.

“The dependence of OEMs on EMS providers is more predominant in the consumer electronics, communications technology and computer, storage and peripheral sectors,” notes research analyst Kasthuri Jagadeesan. “The consumer electronics sector generates maximum revenues and drives the need for outsourcing. These apart, the automotive electronics market also provide growth opportunities for EMS providers to improve on their market revenues.”

However, the increasing competition in the EMS market, the threat posed by the original design manufacturers (ODMs) and penetrating into niche market segments remain constant challenges for EMS providers. In order for EMS providers to sustain their presence in the industry, they must provide value-added services, effective supply chain management and create global footprints.

“The intense competition faced by the EMS providers is forcing them to enhance their value proposition and offer integrated and end-to-end solutions,” says Jagadeesan. “A strategic partnership with OEMs will enable the EMS providers as well as the OEMs to contribute effectively to the success of the end-product and also to achieve high profitability and good market share.”

Since OEMs remain very selective in choosing their EMS partners, EMS providers should focus on maintaining long-term relationship with their customers through their enhanced value-added services, strategic partnership and alliances, as well as through diversification. EMS providers should also focus on maintaining scalable business solutions, customer-centric models, effective supply chain management strategies, penetration into niche markets and effective information technology tools.

For more information contact Patrick Cairns, Frost & Sullivan, +27 (0)21 680 3274, [email protected], www.frost.com





Share this article:
Share via emailShare via LinkedInPrint this page

Further reading:

Fro the editor's desk: AI – a double-edged sword
Technews Publishing News
As with any powerful tool, AI presents challenges, some of which, if not carefully managed, threaten to undo the potential that it can offer.

Read more...
Global semiconductor sales increase
News
The Semiconductor Industry Association (SIA) has announced global semiconductor sales were $57,0 billion during the month of April 2025, an increase of 2,5% compared to the March 2025.

Read more...
Avnet Abacus announced new president
Avnet Abacus News
Avnet Abacus has announced that Mario Merino will succeed Rudy Van Parijs as president of Avnet Abacus, effective 1 July 2025.

Read more...
Avnet Abacus wins multiple prestigious awards
Avnet Abacus News
The awards from Molex recognise outstanding performance, collaboration, and significant growth in the challenging market conditions of 2024.

Read more...
Components distribution slowdown Q1 2025
News
European components distribution (DMASS) experienced a continued slowdown in the first quarter 2025.

Read more...
Semiconductor sales increase 17% YoY
News
The Semiconductor Industry Association (SIA) recently announced global semiconductor sales were $54,9 billion during the month of February 2025, an increase of 17,1% compared to the February 2024 total.

Read more...
Silicon Labs – Q1 results
News
Silicon Labs, a leading innovator in low-power wireless, recently reported financial results for the first quarter, which ended April 5, 2025.

Read more...
Strengthening industry through strategic partnerships at KITE 2025
Specialised Exhibitions News
The KwaZulu-Natal Industrial Technology Exhibition is not just an exhibition, it is a powerhouse of industry collaboration where visitors and exhibitors gain access to authoritative insights, technical expertise, and high-impact networking opportunities.

Read more...
Solar Youth Project calls on industry to step up
News
With the second cohort completed training and the first cohort returning for their final module, host companies are urgently needed to turn the training into a long-term opportunity.

Read more...
Conlog powers SA’s future with national smart meter rollout
News
Conlog recently secured the RT29-2024 contract from National Treasury, which is seen to be a major milestone towards modernising SA’s utility infrastructure.

Read more...









While every effort has been made to ensure the accuracy of the information contained herein, the publisher and its agents cannot be held responsible for any errors contained, or any loss incurred as a result. Articles published do not necessarily reflect the views of the publishers. The editor reserves the right to alter or cut copy. Articles submitted are deemed to have been cleared for publication. Advertisements and company contact details are published as provided by the advertiser. Technews Publishing (Pty) Ltd cannot be held responsible for the accuracy or veracity of supplied material.




© Technews Publishing (Pty) Ltd | All Rights Reserved