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Asia on the rise despite global technology slump

Posted: 16 Jan 2013 ?? ?Print Version ?Bookmark and Share

Keywords:PC? precision engineering? LED? manufacturing?

According to a recent Ernst & Young report on trade in emerging markets, Asia is poised to move up the value chain leading to increased domestic demand for higher-value products. Western manufacturers are likely to continue to see margins squeezed by growing competition from their lower cost Asian counterparts and cuts in government support.

The global PC market declined in the fourth quarter of 2012, the first such holiday season drop in more than five years. Sales fell to 89.8 million units, down 6.4 per cent compared to the fourth quarter of 2011, according to a report from IDC. However, Asian vendors Lenovo and Asus were among the few to rack up gains in the quarter and the year. U.S. giants Hewlett-Packard and Dell held on to their first and third ranking, respectively, but faced market share declines. Lenovo's annual sales grew 19.2 per cent to hit a global market share of 14.9 per cent for 2012 while Asus had a 17 per cent increase to a 6.8 per cent share, according to research firm IDC.

Asia takes active part in evolving market dynamics
For most tech vendors, the Asian market is ideal for expansion since it is unfettered by legacy systems and practices of Western countries. The region's sheer size, however, has proven difficult to navigate with nuances that make individual country markets unique. Full story here.

Ernst & Young notes that within the Asia Pacific, economies are growing stronger and are able establish cross-regional free trade agreements across various industries.

Singapore, for example, has built up an extensive system of oil majors, drilling contractors, specialised marine equipment and offshore rig manufacturers, as well as engineering service providers. According to the country's Ministry of Trade & Industry, Singapore currently dominates 70 per cent of the global market share in the manufacturing of jack-up rigs for offshore drilling resulting with a total turnover of $13.3 billion in 2011 and current net orders of more than $16 billion with deliveries extended to 2015. With the projected increase in demand in Asia for oil exports, the outlook for machine tool companies specialising in producing machinery parts for the oil & gas industry continues to remain upbeat. Riding this wave, the MTA2013 precision engineering industry trade event will feature companies like Carl Zeiss which will highlight its latest multi-sensor measuring machine.

The global LED market is anticipated to exceed $13 billion in 2013, driven by continued double-digit growth in solid state lighting. Global manufacturing capacity will grow 24 per cent in 2013 with Korea expected to stay on top, representing over 15 per cent of the world's production capacity. As the LED sector transitions from scale investments and contemplates new technologies such as GaN on silicon and new package types and materials, global leaders will convene at LED Korea to discuss these changes as well as SSL standardisation issues.

Even if the latest hot gadgets are developed in U.S.-based labs, majority, if not all, of these products are assembled in Asian production plants. This has led analysts to believe that more R&D funds will flow to Asia as companies find it cost-effective for their design engineers set up labs near to where they can quickly create prototypes and test their ideas.





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