Global Sources
EE Times-Asia
Stay in touch with EE Times Asia
EE Times-Asia > Controls/MCUs

Electronics, EMS players exploit market opportunities to survive

Posted: 26 Jan 2011 ?? ?Print Version ?Bookmark and Share

Keywords:electronics industry challenges? PC sales growth? electronic manufacturing services industry?

While 2011 offers countless opportunities for electronics companies, the electronics industry must also take a serious look at the concomitant challenges, all of which will determine the direction it will take in the year of the rabbit.

Market instability remains a major industry concern. Tight supply chains will continue to affect the activities of OEMs and EMS providers. Moreover, intense competition among OEMs will impact the market projections and pricing strategies of EMS providers. In the long term, EMS providers will be compelled to re-engineer their businesses in order to survive.

Arthur Tan

Tan: While challenges continue to hamper electronics and EMS companies, market developments and new growth regions present numerous opportunities.

The projected 14.3 percent increase in worldwide PC shipments in 2010 initially offered hope in a bleak environment. Manufacturers considered it a good sign for 2010. Experts were however quick to point out the original growth forecast of 17.9 percent for the PC segment. Overall, semiconductor revenue for 2010 was projected to rise 32 percent year-on-year, down from analysts' previous forecast of 35.1 percent.

Oversupply will be a major concern in 2011 as far as LCDs are concerned. According to reports, shipments of large-sized LCD panels in 1H 2010 exceeded sales by 36.4 percent, a gap much wider than that recorded in 2009.

To make matters worse, Intel projected weaker chip sales towards the end of 2010. Major vendors HP and Dell also reported lackluster PC sales in 3Q 2010, dashing hopes for revenue growth in the last months of 2010.

Companies will also have to make major adjustments as media tablets reshape the PC landscape. Experts predict that tablet computers would displace approximately 10 percent of PC units by 2014. While the netbook is the current default device for mobile computing, computer vendors must quickly respond to the continued rise of media tablets. Vendors that fail to capitalize on this development stand to lose a lot in the coming years.

EMS players adapt to changing times
Similarly, EMS players must contend with supply imbalance, tight inventory and oversupply of raw materials, all brought about by their decision to reduce production targets.

The raw materials-finished goods imbalance has prevailed since 2008. According to reports, raw materials (68 percent) outweigh both work-in-process components (17 percent) and parts for finished goods (15 percent), which are at their lowest levels.

1???2???3?Next Page?Last Page

Article Comments - Electronics, EMS players exploit mar...
*? You can enter [0] more charecters.
*Verify code:


Visit Asia Webinars to learn about the latest in technology and get practical design tips.

Back to Top