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:

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...
Zuchongzhi-3 sets new benchmark
News
This latest superconducting quantum computing prototype features 105 qubits and 182 couplers to operate at a speed 10¹5 times faster than the most powerful supercomputer currently available.

Read more...
Automatic device attestation certificate for Panasonic
News
DigiCert recently announced it has partnered with Panasonic Industry Europe to integrate DigiCert Device Trust Manager with Panasonic’s PAN-MaX intelligent manufacturing service for seamless Matter certification of interoperable smart home devices.

Read more...
From the editor's desk: Are we really being ripped off?
Technews Publishing News
To the surprise of many customers, installing solar panels does not always eliminate their utility bill – and in some cases, the power utility may impose additional charges on solar-powered homes.

Read more...
Winner of the Advanced Electronics Challenge
Avnet Silica News
Avnet Silica has named Hydronauten winner of the Advanced Electronics Challenge for breakthrough AI-driven vibration damping technology.

Read more...