Growth opportununites abound in the Southeast Asian electronics manufacturing market, OEMs increasingly outsource

SINGAPORE, 2 Oct. 2007. An increasing amount of original equipment manufacturers (OEMs) are outsourcing electronics manufacturing activities to concentrate on their core competencies. For electronics manufacturing services (EMS) providers, this trend presents an opportunity to create economies of scale by spreading fixed costs to a number of OEMs.

New analysis from Frost & Sullivan (http://www.surfacemounttechnologies.frost.com), "Electronics Manufacturing Services Opportunities in Southeast Asia" finds that electronics manufacturing services markets in Southeast Asia earned revenues of $20.70 billion in 2006 and estimates this figure to reach $38.39 billion in 2013.

The increased outsourcing trend has also led to the development of original design manufacturers (ODMs) that not only provide design services but sell finished products to the OEMs, which they can label and sell under their own brands.

EMS providers can also benefit from pursuing collaborative design with OEMs and share any IP created rather than providing complete design services (as per ODM model) to prevent any conflict of interests. This arrangement can also provide EMS providers with the knowledge and skills gained during the design phase to the manufacturing phase of a product.