Chinese Electronic Contract Manufacturing Markets

The rapid growth of the electronics industry has resulted in tremendous expansion for the electronic contract manufacturing (ECM) markets, with mainland China emerging as the manufacturing hub of Asia. As original equipment manufacturers (OEMs) seek new means of cost effective production processes, abundant opportunities are available for ECM participants that can take advantage of an increasing outsourcing trend. With strong growth projected over the forecast period, this Frost & Sullivan research provides an in-depth analysis on the emerging Chinese ECM markets. This study outlines important business drivers, strategies, and trends allowing users to take advantage of lucrative industry opportunities.

Tactical Mergers and Acquisitions Essential for Success

"Some of the largest outsourcing OEMs in this Chinese market are multinational corporations that do not want to be restrained by having a contract manufacturer in a single region," states the author of this research. As a result, large corporations are demanding that electronic contract manufacturers have a global presence with accompanying distribution channels. This trend is resulting in strategic alliances between China's ECM companies and OEMs. According to the author, "The merger between these two manufacturing segments represents a win-win relationship, with OEMs able to tighten supply chains, reduce time-to-market, and leverage partners' manufacturing and engineering expertise."

Cost-Efficiency Key Strategy in Fiercely Competitive Market

While outsourcing is the direct result of OEMs trying to reduce internal costs, electronic contract manufacturers must also focus on their own cost-efficiency efforts. Through power management and precise planning for machine and product line operation times, overall production costs can be kept under control, thereby increasing profit margins.

"In China's market environment, the winner is the one who has the skills to produce reliable products at the lowest cost," says the author. With outsourcing expected to increase, it is necessary for market participants to streamline their own research and development costs in order to stay competitive. This Frost & Sullivan study offers the most comprehensive information available regarding the global issues impacting the Chinese ECM field enabling participants to implement effective strategies to maximize their market share and multiply their returns.