Contract Manufacturing
Market
Strategies and Forecasts 2002-2007
WinterGreen
Research, Inc.
Lexington,
Massachusetts
www.wintergreenresearch.com
Contract Manufacturing
Market Strategies and Forecasts 2002-2007
Outsourced manufacturing is characterized by low margins.
Contracts are won by achieving low prices and high volume, not high
margins. The corporate culture is
driven by a concern about control of costs at every level of the organization.
In this manner, contract manufacturers are able to take over existing
factories and run them more efficiently than the previous owners.
Contract manufacturers depend on a highly skilled workforce and
unique culture. These factors
represent a distinct competitive advantage and are fundamentally important to
achieving strategic objectives. Contract
manufacturers are really able to deliver products more efficiently than other
companies because of these factors. The
business is like running football teams.
Team spirit plays a considerable role in the success of the
organizations.
Through
innovative compensation and broad-based employee stock ownership, outsourcing
companies have developed an entrepreneurial, participative, and team-based
culture, which is driven by the desire to continually exceed customer
expectations. Commitment to
customers is central to success in the market.
Contract manufacturing firms provide a wide variety of products and
services to customers, including manufacture, assembly and test of complex
printed circuit assemblies, or PCAs. Vendors
provide full system assembly of final products, primarily on a build-to-order
basis.
A broad range of EMS services include design, component selection
and procurement, prototyping, product assurance, assembly, test, failure
analysis, full supply chain management, worldwide distribution, and
after-sales support.
Outsourced electronics manufacturing market forecasts 2000 To 2006
indicate significant market opportunity interrupted by the technical
difficulties caused by the disruption of September 11, 2001 and the downturn
in the telecommunications industry. Markets
at $61.4 billion in 2000 are expected to dip to $59.7 in 2001 and return to
2000 levels by 2003.
Strong
growth is anticipated throughout the remainder of the forecast period with
markets reaching $111.8 billion by 2007.
Companies Profiled
Acer
Arimasoft
Celestica
Philips / China Electronics Corporation (CEC)
Flextronics International
Jabil Circuit
MiTAC International Corporation
SCI Systems
Solectron
Synnex Information Technologies
REPORT
METHODOLOGY
This is the one hundred and third report in a series of market research reports that provide forecasts in communications, telecommunications, the Internet, computer, software, and telephone equipment. The project leaders take direct responsibility for writing and preparing each report. They have significant experience preparing industry studies. Forecasts are based on primary research and proprietary databases. Forecasts reflect analysis of the market trends in the segment and related segments. Unit and dollar shipments are analyzed through consideration of dollar volume of each market participation in the segment. Market share analysis includes conversations with key customers of products, industry segment leaders, marketing directors, distributors, leading market participants, and companies seeking to develop measurable market share. Over 200 in depth interviews are conducted for each report with a broad range of key participants and opinion leaders in the market segment.
YOU MUST HAVE THIS STUDY
Contract Manufacturing Executive Summary
Low
Margins
Contract
Manufacturing Market Segments
Variety
Of Products And Services
EMS
Approach To Manufacturing
Complete
Systems
Turnkey Manufacturing Variables
Printed
Circuit Board (PCB) Assembly Business
Faster
Time To Market
Supply
Chain Automation
Integration
Platforms
Contract Manufacturing Market Description
1.1 Building An
Economy In Less Developed Parts Of The World
1.2 Benefits Of
Outsourced Manufacturing 1-2
1.3
Enterprise Application Integration / Different Companies
Functioning As One
1.4 Competitive
Issues
1.5 Global
Electronics Design And Manufacturing Services
1.5.1
Design
1.5.2
Photonics
1.5.3
Prototyping
1.6 Systems
Assembly
1.6.1
Product Assembly And Test
1.6.2
Full System Assembly
1.6.3
Product Assurance
1.7 Technology,
Research, And Development
1.8 Advanced Test
Capabilities
1.9 Factors
Impacting Operating Results 1-23
1.10
Quality Processes And Test Technology Provide
Competitive Advantage
1.11 Evolution Of The EMS
Industry
1.12 Enterprise Core
Competencies
1.13 EMS Core Competencies
1.14 EMS Key Success Factors
1.15 Market Location
1.16 EMS Services
1.16.1
Supply Chain Management
1.16.2
Supply Chain Services
1.16.3
Materials Procurement And Management
1.16.4
Logistics
1.16.5
Inventory Risk Minimization
1.16.6
Sole-Source Supplier Management
1.16.7
Procurement Of Components
1.17 Enclosures
1.18 Failure Analysis
1.19 Packaging
1.20 Global Distribution
1.21 Network Services
1.22 Technologically Advanced Products With Short Life Cycles
1.23
Contract Manufacturers Response To Severe Economic
Downturn
Contract Manufacturing Market Shares And Market Forecasts
2.1 Market Driving
Forces
2.2 Electronics
Manufacturing Services Industry Market Issues
2.3 Provider Scale
And Diversity
2.3.1
Turnkey Manufacturing Variables
2.4 Market Growth
Trends
2.5 Market Trends
2.6 EMS Industry
Competition
2.7
Outsourced Electronics Manufacturing Market Shares
2000 And 2001
2.8 Outsourced
Electronics Manufacturing Market Forecasts
2002 To 2007
2.9 Internet
2.9.1
Data Traffic
2.9.2
Changing Internet Traffic Patterns
2.10 Contract Manufacturing Segments
2.11 Communications Contract
Manufacturing Market Shares And
Forecasts
2.11.1
Telecommunications Outsourcing
2.11.2
Increase In Bandwidth Demand
2.11.3
Optical Switching
2.12 Outsourced Server
Manufacturing
2.13 Outsourced Personal
Computer Manufacturing
2.14 Outsourced Peripheral
Computer Device Manufacturing
2.15 Outsourced Medical
Manufacturing
2.16 Outsourced Automotive
Manufacturing
2.17 Manufacturing Outsourcing
Segment Summary Analysis
2.18 Manufacturing Outsourcing
Regional Analysis
2.18.1
Celestica Geographies 2000
Market Shifts In Contract Manufacturing
3.1 Market
Consolidation
3.2 EMS Industry
Structural Shift
3.2.1
Manufacturing Facilities Sold To Outsourcers
3.3 Risks Of Outsourcing Acquisitions
3.4 Solectron
3.4.1
Solectron / Alcatel
3.4.2
Solectron / Nortel and Ericsson Manufacturing
3.4.3
Solectron / IBM
3.5 Celestica
3.5.1
NEC / Celestica
3.5.2
Celestica Purchases Avaya Manufacturing
3.5.3
Avaya Outsourced Manufacturing To Celestica
3.5.4
Celestica / Lucent
3.5.5
Celestica / JDS Uniphase
3.5.6
Celestica / Motorola
3.6 Flextronics
3.6.1
Flextronics / Alcatel
3.6.2
Flextronics / Motorola
3.7 Sanmina /
Alcatel
3.8 China
Electronics Corporation (CEC) 3-17
3.8.1
Philips / China Electronics Corporation (CEC)
3.8.2
Ericsson Outsourcing
3.9 SCI
3.9.1
SCI Global Capabilities
3.9.2
SCI Systems / Nortel Networks
3.10 Sagem
3.11 Motorola / Flextronics
3.11.1
Ericsson / Flextronics
3.12 Synnex Distribution
Agreements
EMS Manufacturing Outsourcing Company Strategies
4.1 Solectron
Strategy
4.1.1
Quality
4.1.2
Solectron Partnerships
4.1.3
Turn-Key Capabilities
4.1.4
Advanced Manufacturing Process Technology
4.1.5
Diverse Geographic Operations
4.1.6
Manufacturing Strategy
4.1.7
Solectron Americas Operations
4.1.8
Mexico
4.1.9
Brazil
4.1.10
Puerto Rico
4.1.11
Europe
4.1.12
Asia/Pacific
4.1.13
Solectron New Product Introduction (NPI) Centers
4.1.14
Integrated Solution Global Services
4.1.15
Electronics Assembly
4.1.16
Computer-Aided Testing
4.1.17
Supply Chain Automation
4.1.18 Evaluating Board Designs
4.2 Jabil Strategy
4.2.1
Utilize Work Cell Business Units
4.2.2
Parallel Global Production
4.2.3
Systems Assembly And Direct Order Fulfillment
4.2.4
Acquisition
4.2.5
Jabil Approach To Manufacturing
4.2.6
Work Cell Business Units
4.2.7
Business Unit Management
4.2.8
Continuous Flow
4.2.9
Computer Integration
4.2.10
Supply Chain Management
4.2.11
Jabil Design Services
4.2.12
Electronic Design
4.2.13
Production Design
4.2.14
Industrial/Mechanical Design Services
4.2.15
Systems Assembly, Test, And Direct Order Fulfillment Services
4.2.16
Repair And Warranty Services
4.2.17
Jabil Technology
4.2.18
International Operation Strategy
4.2.19
Strategy
4.3 Celestica Strategy
4.4 Flextronics
Strategy
4.4.1
Flextronics Location Of Facilities
4.4.2
Flextronics End-To-End Solution Strategy
4.4.3
Flextronics Strategy To Support A Complete Product On
A Global Basis
4.4.4
Customer Product Development and Manufacturing Strategy
4.4.5
Leverage Global Presence
4.4.6
Industrial Parks Strategy
4.4.7
Comprehensive Solutions
4.4.8
Streamline Business Processes Through Information Technologies
4.4.9
Pursue Strategic Opportunities
4.5 SCI Systems
Strategy
Contract Manufacturing Company Profiles
5.1 Acer
5.2 Arimasoft
5.3 Celestica
5.3.1
Celestica Revenue
5.3.2
Celestica Customers
5.3.3
Celestica Job Cuts
5.3.4
Celestica Supply Arrangements
5.3.5
NEC / Celestica
5.3.6 Celestica
European Wireless Communications Manufacturing
Operations
5.3.7
Celestica Purchases Avaya Manufacturing
5.3.8
Celestica Alliance With Avaya
5.3.9
Celestica Buys Sagem Unit
5.3.10
Celestica Acquires Two Motorola Factories
5.3.11
Celestica / Omni Industries
5.3.12
Lucent Technologies Sells Plants To Celestica
5.3.13
Celestica / Omni Industries
5.3.14
Celestica / Motorola Facilities
5.3.15
Celestica / IronBridge Networks
5.3.16
Celestica / Bull Electronics
5.3.17
Celestica / Primetech
5.3.18
Celestica / IBM
5.3.19
Celestica / Alventive
5.3.20
Celestica Electronics Products
5.3.21
Celestica S100 And S150 Series DC To DC Converters
5.3.22
Celestica DDR (Double Data Rate) Memory Modules
5.3.23
Celestica Facilities
5.3.24
Celestica Regional Revenue
5.4 Philips / China
Electronics Corporation (CEC)
5.5 Flextronics
International
5.5.1 Flextronics
Significant Business Combinations Completed
In Fiscal 2001
5.5.2
Flextronics Revenue
5.5.3
Flextronics Customers
5.5.4
Flextronics Revenue
5.5.5
Flextronics Acquisitions
5.5.6
Flextronics Products
5.6 Jabil Circuit
5.6.1
Jabil Customers
5.6.2
Jabil Acquisitions
5.6.3
Jabil Acquisition Of Marconi’s U.K. And Italian Facilities
5.6.4
Jabil Circuit Opens In Tokyo
5.6.5
Jabil Regions Served
5.6.6
Jabil Revenue
5.6.7
Jabil Fiscal Year 2001 Results
5.6.8
Jabil Restructuring
5.6.9
Jabil Positioning
5.7 MiTAC
International Corporation
5.8 SCI Systems
5.8.1
SCI Revenue
5.8.2
SCI Acquisitions
5.8.3
Capacity And Organizational Realignment
5.8.4
Sector Analysis
5.8.5
Regional Revenue Analysis
5.8.6
SCI Systems / Nortel Networks
5.8.7
Sanmina / SCI Systems
5.8.8
Sanmina
5.8.9
SCI Systems Realignment Of Capacity And Workforce
5.8.10
SCI Plant Expansions
5.9 Solectron
5.9.1
Solectron Customers
5.9.2
Solectron Positioning
5.9.3
Solectron Geographical Reach
5.9.4
Solectron Regional Analysis
5.9.5
Solectron Acquisitions
5.9.6
Technology Solutions
5.9.7
Global Services
5.9.8
Solectron International Sales
5.9.9
Solectron Net Sales to Major Customers
5.9.10
Solectron Customer Base
5.10 Synnex Information
Technologies
5.10.1 Synnex Key Suppliers
Tables and Figures
Table
ES-1
ES-
Manufacturing
Outsourcing Shipment Forecasts By Segment, 2002-2007
Figure
ES-2
Global
Manufacturing Outsourcing Market Forecasts, Dollars, 2002-2007
Table
ES-3
EMS
Approach To Achieving High Levels Of Manufacturing Performance
Table
ES-4
Turnkey
Manufacturing Business Aspects
Table
ES-5
Mission
Critical Messaging As A Base For Integration Software
Table
ES-6
Mission
Critical Messaging Integration Functions
Table
ES-7
Integration
Platform Functions
Table
1-1
Pillars
Of An Economy
Table
1-2
Telecommunications
And Computer Marketing Organization Benefits From Outsourcing Manufacturing
Table
1-3
Contract
Manufacturers Address Customer Needs
Table
1-4
Contract
Manufacturer Benefits to Customers
Table
1-5
Contract
Manufacturer Partnering With Customers
Table
1-6
Outsource
Manufacturer Competitive Positioning
Table
1-7
Outsourcer
ASIC Design Services
Table
1-8
Advanced
Assembly And Manufacturing Technologies
Table
1-9
Advanced
Manufacturing Testing Technologies
Table
1-10
Specialized
Assembly Process Technologies
Table
1-11
Advanced
Test Technologies
Table
1-12
Inspection
Technology
Table
1-13
Factors
Impacting EMS Operating Results
Table
1-14
Issues
For Contract Manufacturers
Table
1-15
Factors
Impacting Operating Results For Contract Manufacturers
Table
1-16
Companies
Using Contract Manufacturing
Table
1-17
Array
Of Products Made By Contract Manufacturers
Table
1-18
Factors
In Contract Manufacturing Significant For Reducing Overall Product Costs And
Reducing The Time To Market
Table
1-19
Telecommunications
And Computer Marketing Enterprise Organization Core Competencies
Table
1-20
EMS
Core Competencies
Table
1-21
Advantages
Of EMS
Table
1-22
Key
Success Factors For EMS Providers
Table
1-23
Supply
Chain Services
Table
1-24
Impact
Of Enterprise Application Integration Technologies And XML On Manufacturing
Outsourcing
Table
2-1
Outsourced
Manufacturing Market Driving Forces
Table
2-2
Outsourced
Manufacturing Product Cost Reductions
Table
2-3
Outsourced
Manufacturing Market Driving Forces Relating To Accelerated Product Management
Table
2-4
Outsourced
Manufacturing Market Driving Forces Relating To Access To Advanced Technologies
Table
2-5
Outsourced
Manufacturing Market Driving Forces Relating To Supply Chain Management
Table
2-6
Outsourced
Manufacturing Market Driving Forces Relating To Reduced Capital Investment In
Manufacturing
Table
2-7
Issues
For The EMS Industry
Table
2-8
Growth
Of The Internet Impact On Manufacturing Markets
Table
2-9
Turnkey
Manufacturing Business Aspects
Table
2-10
Electronic
Outsourcing Manufacturer Market Growth Trends
Table
2-11
OEM Reasons To Outsource To The EMS Industry
Figure
2-12
Outsourced Manufacturing Revenue By Company, 2000
Figure
2-13
Outsource Manufacturing Shipments By Company, First Three Quarters 2001
Table
2-14
Global Manufacturing Outsourcing Market Shares, Dollars, 2000 And First Three Quarters Of 2001
Figure
2-15
Global
Manufacturing Outsourcing Market Forecasts, Dollars, 2000-2007
Table
2-16
Manufacturing Outsourcing Shipment Forecast, 2002-2007
Figure
2-17
Internet Traffic Market Forecasts, 2000-2006
Table
2-18
Table
2-19
Systems
Used To Achieve Fiber Optic Scalability
Figure
2-20
Outsourced Manufacturing Shipments By Segment, Dollars, 2000
Figure
2-21
Outsourced Manufacturing Shipments By Segment, Dollars, 2001
Table
2-22
Manufacturing Outsourcing Shipments By Segment, Dollars, 2000
Figure
2-23
Global Outsourced Communications Equipment Manufacturing Market Shares, 2000
Table
2-24
Contract Communication Manufacturing Market Shares, Dollars, 2000
Figure
2-25
Global Outsourced Communications Equipment Manufacturing Market Shares, 2001
Table
2-26
Contract Communication Manufacturing Market Shares, Dollars, 2001
Figure
2-27
Global Manufacturing Outsourcing Communications Equipment Market Forecasts, Dollars, 2002-2007
Figure
2-28
Global Manufacturing Outsourcing Telecommunications Equipment Market Forecasts, Dollars, 2002-2007
Figure
2-29
Global Manufacturing Outsourcing Network Equipment Market Forecasts, Dollars, 2002-2007
Figure
2-30
Global Outsourced Server Manufacturing Market Shares, 2000
Table
2-31
Contract Server Manufacturing Market Shares, Dollars, 2000
Figure
2-32
Global Outsourced Server Manufacturing Market Shares, 2001
Table
2-33
Contract Server Manufacturing Market Shares, Dollars, 2001
Figure
2-34
Global
Manufacturing Outsourcing Server Market Forecasts, Dollars, 2000-2006
Figure
2-35
Global Personal Computer Outsourcing Manufacturing Market Shares, 2000
Table
2-36
Contract Personal Computer Manufacturing Market Shares, Dollars, 2000
Figure
2-37
Global Personal Computer Outsourcing Manufacturing Market Shares, 2001
Table
2-38
Contract Personal Computer Manufacturing Market Shares, Dollars, 2001
Figure
2-39
Global
Manufacturing Outsourcing Personal Computer Market Forecasts, Dollars, 2002-2007
Figure
2-40
Global Outsourced Manufacturing Of Computer Peripherals, Market Share, 2000
Table
2-41
Contract Computer Peripheral Manufacturing Market Shares, Dollars, 2000
Figure
2-42
Global Outsourced Manufacturing Of Computer Peripherals, Market Shares, 2001
Table
2-43
Contract
Computer Peripheral Manufacturing Market Shares, Dollars, 2001
Figure
2-44
Global Manufacturing Outsourcing Computer Peripheral Market Forecasts, 2002-2007
Figure
2-45
Global Outsourced Medical Equipment Manufacturing Market Shares, 2000
Table
2-46
Contract Medical Manufacturing Market Shares, Dollars, 2000
Figure
2-47
Global Outsourced Medical Equipment Manufacturing Market Shares, 2001
Table
2-48
Contract Medical Manufacturing Market Shares, Dollars, 2001
Figure
2-49
Figure
2-50
Table
2-51
Figure
2-52
Table
2-53
Figure
2-54
Table
2-55
Table
2-56
Table
2-57
Table
2-58
Table
2-59
Table
2-60
Table
3-1
Factors
Driving EMS Market Consolidation
Table
3-2
Acquisition
Opportunities For Contract Manufacturing
Table
3-3
Selected
Manufacturing Facilities Sold To Outsourcers
Table
3-4
SCI
Global Capabilities
Table
3-5
SCI
Global Benefits to Customers
Table
3-6
Synnex
Distribution Agreements
Table
4-1
Solectron
Strategic Positioning
Table
4-2
Solectron
Techniques To Achieve Excellence In Manufacturing
Table
4-3
Solectron
Objectives To Achieve Excellence In Manufacturing
Table
4-4
Solectron
Management Positioned To Achieve Excellence In Manufacturing
Table
4-5
Range
Of Repair Solutions
Table
4-6
Jabil
Strategies
Table
4-7
Jabil
Effort To Establish and Maintain Long-Term Customer Relationships
Table
4-8
Jabil
Approach To Achieving High Levels Of Manufacturing Performance
Table
4-9
Jabil
Design Services
Table
4-10
Jabil
Production Design Services
Table
4-11
Jabil
Advanced Testing Technologies
Table
4-12
Flextronics
End-To-End Solutions
Table
4-13
Flextronics
Strategies
Table
4-14
Benefits
Of Flextronics Industrial Parks Approach To Production And Distribution
Table
4-15
Flextronics
Industrial Parks
Table
4-16
Flextronics
Information Technologies Utilization
Table
5-1
Celestica's
Electronic End Products
Table
5-2
Flextronics
Significant Business Combinations Completed In Fiscal 2001
Table
5-3
Flextronics
Customers
Table
5-4
Flextronics
Products And Customers
Table
5-5
Jabil
Services Provided
Table
5-6
Jabil
Target Markets
Table
5-7
Jabil
Turnkey EMS solutions
Table
5-8
Benefits
Of Sanmina And SCI Systems Merger
Table
5-9
SCI
Systems Realignment Program Forces
Table
5-10
Solectron
Services Positioning
Table
5-11
Synnex
Business Model
Table
5-12
Synnex
Key Suppliers
About the Company
WinterGreen
Research, founded in 1985, provides strategic market
assessments in telecommunications, communications equipment, health care, and
advanced computer technology. Industry
reports focus on opportunities that will expand existing markets or develop
major new markets. The reports
assess new product and service positioning strategies, new and evolving
technologies, and technological impact on products, services, and markets.
Market shares are provided. Leading
market participants are profiled, and their marketing strategies, acquisitions,
and strategic alliances are discussed. The
principals of WinterGreen Research have been involved in analysis and
forecasting of international business opportunities in telecommunications and
advanced computer technology markets for over 30 years.
About the Principal Authors
Ellen T. Curtiss, Technical Director,
co-founder of WinterGreen Research, conducts strategic and market assessments in
technology-based industries. Previously
she was a member of the staff of Arthur D. Little, Inc., for 23 years, most
recently as Vice President of Arthur D. Little Decision Resources, specializing
in strategic planning and market development services.
She is a graduate of Boston University and the Program for Management
Development at Harvard Graduate School of Business Administration.
She is the author of recent studies on worldwide telecommunications
markets and the Top Ten Telecommunications market analysis and forecasts.
Susan Eustis, President, co-founder of
WinterGreen Research, has done research in communications and computer markets
and applications. She holds several
patents in microcomputing and parallel processing. She is the author of recent studies of the Regional Bell
Operating Companies' marketing strategies, Internet equipment, a study of
Internet Equipment, Worldwide Telecommunications Equipment, Top Ten
Telecommunications, Digital Loop Carrier, Web Hosting, and Application
Integration markets. Ms. Eustis is
a graduate of Barnard College.
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