EMS grows less than ODM, still controls majority of industry, IDC finds
IDC encourages ODMs to evaluate current product and customer portfolios, and look beyond notebooks and mobile phones for future growth.
By Suzanne Deffree, Managing Editor, News -- EDN, May 12, 2008
The worldwide electronic manufacturing services (EMS) industry grew at the annual rate of 17% in 2007, generating $268.1 billion in revenues, according to a report released by IDC today.
However, the market research company reported that while the original design manufacturer (ODM) sector continued to grow at the higher rate of 23% in 2007, the EMS sector still accounted for more than 60% of the industry.
Computers and consumer devices remained the two largest product segments, generating 36% and 29% of the EMS industry revenue respectively last year. The regional revenue mix was also fairly stable in 2007 due the realignments US EMS companies undertook to shift their geographic footprints offshore, the company reported.
"While computing remains the largest single sector, followed by consumer devices, the industrial segment experienced constant solid growth for EMS firms and displaced servers and storage as the third largest product segment for the industry," said Michael Palma, senior research analyst for IDC's semiconductor group, in a statement.
"ODMs need to evaluate current product and customer portfolios, and look beyond notebooks and mobile phones for future growth. EMS and ODM firms should also take steps to mitigate effects from a likely US recession," he continued.
According to IDC, number one ranking Foxconn maintained its lead in the market, with 16% of all industry revenues, growing by 46% from 2006. Number two ranking Flextronics grew to 12% market share as it acquired Solectron. And number three ranking Quanta enjoyed the strongest annual growth of 57%, based on its success in the notebook segment winning business from Apple and Dell, IDC said.
