By Stephen Las Marias, Group Editor, OnlineIn the midst of global economic uncertainties highlighted by rising oil prices, accelerating inflation in both China and India, and the health of the U.S. economy, Asia’s electronics manufacturing sector continues its unabated growth. According to market research firm In-Stat, Asia’s contract electronics manufacturing (CEM) market will grow from $121.5 billion in 2006 to $281.8 billion in 2011. The region will capture 55.1 percent of the global electronics manufacturing services (EMS) market in 2011, up from 45 percent in 2006, and China is forecast to account for about 76 percent of the Asian EMS/ODM (original design manufacturing) markets by 2011, driven by growth from the consumer electronics and communications segments.
However, although China will dominate the EMS/ODM market, India, and Southeast Asian countries including Singapore, Malaysia, Thailand, and Vietnam will emerge as new dominant players. According to World Bank’s World Development Indicators online database in June 2007, East and Southeast Asia accounts for more than 40 percent of the world’s combined GDP for exports of manufactured products. Market analyst iSuppli forecasts the Southeast Asian contract manufacturing market to rise to $24.9 billion by 2011, an increase of about $9 billion from $16.2 billion in 2006. By 2011, Southeast Asia is expected to account for 7 percent of global electronics contract manufacturing revenue, up from 6.3 percent in 2006, according to iSuppli.
During the
Globaltronics 2008 Roundtable Discussion, David Cohen, Director of Asian Economic Forecasting at Action Economics, states that Asia’s electronics industry so far has been riding out the storm being experienced in western countries. He points out that demand from emerging markets, in particular India and China, has been supporting the overall growth of the region’s electronics industry. One key market is the consumer electronics segment, whose main drivers include LCD TVs, DVD players, mobile phones, notebook PCs, video game consoles, camcorders and navigation devices.
Christopher Fussner, President of TransTechnology Pte Ltd, a major distributor of SMT and semiconductor capital equipment, affirms this fact. He says India, with its automotive and consumer electronics segments, remains very strong, and Vietnam is showing tremendous growth. Japanese manufacturing in Thailand, he observes, has also been growing, as makers tend to look into other places for cost efficiencies. Malaysia, meanwhile, is moving up the value chain as some manufacturers move out of China due to new labor and taxation laws.
Electronic manufacturing trends changing paradigmOther than employing improved manufacturing technologies and streamlined processes to minimize costs and optimize manufacturing, electronics manufacturers need to implement a broader scope of activities and strategies to elevate the value chain to enhance competition. The continued expansion of the EMS suppliers’ role in terms of design for manufacturability and supply chain, innovation, operational excellence and sustainability, are key factors for the future growth of the industry. This can also be achieved by adopting cost-saving measures like energy-efficient manufacturing and initiatives to decrease the harmful effects to the global environment, and to uphold health and safety directives.
Core manufacturing competencies and growing cost-effective skilled workforce have helped Asia be the leader in electronics manufacturing for the past several years. Taking advantage of these competencies and also constantly improving on the skills and strategies to elevate the value chain will help Asia continue leading global production and export of electronics. The challenge is to identify the higher value segments in the electronic components market; for instance, integrated circuits, testing and development of components and even design, which require higher levels of skilled workers to utilize advanced manufacturing technology.
One market opportunity in this advanced manufacturing technology segment is printed electronics, according to Dr. Albert Lu, Program Manager and Senior Scientist at the Singapore Institute of Manufacturing Technology (SIMTech). Printed electronics is the printing of electronics circuit/design on a common media such as paper or plastic using standard printing processes, which utilizes electrically functional electronic inks. This process, which can be used for active devices such as thin film transistors, is expected to facilitate widespread and very low-cost electronics useful for applications not typically associated with conventional silicon-based electronics, such as flexible displays, smart labels and RFID tags. However, Dr. Lu points out that there are still technology gaps in this industry; in particular, process stability, materials, design, and the concurrent development of process, materials and design. Nevertheless, the technology is expected to open up significant market opportunities and benefits once it has matured.
GlobalTRONICS 2008The upcoming GlobalTRONICS 2008, Asia’s dedicated international sourcing, networking and educational platform for the electronics manufacturing industry for optimized manufacturing efficiencies and enhanced competitiveness, will offer the latest in electronics manufacturing technology, products and services. The exhibition, will be held in Singapore at the SUNTEC Convention Centre from 9 to 12 September 2008, will showcase six electronics manufacturing segments from more than 550 international suppliers from 30 countries worldwide and feature informative forums, seminars, conferences and workshops highlighting the electronics manufacturing industry in Asia.
