China's electronic manufacturing service revenue will increase to $45.5 billion and original design manufacturing to $108 billion in 2008, says survey

The continuing migration of production capacity to China will help drive robust growth for China’s electronic manufacturing service (EMS) and original design manufacturing (ODM) markets over the next several years, iSuppli Corp. predicts.

In China, EMS revenue will increase to $45.5 billion in 2008, up from $17.7 billion in 2003 to post a compound annual growth rate (CAGR) of 21 per cent, according to iSuppli.

Meanwhile, China’s ODM revenue will grow significantly over the next few years, rising to $108 billion in 2008, compared with $39.6 billion in 2003, for a CAGR of 22 per cent.

Specific factors propelling the growth of China’s EMS revenue include:

* The global market for electronic systems is undergoing a robust expansion and is expected to continue growing every year through at least 2008.

* Original equipment manufacturers (OEMs) will continue to outsource production, in order to benefit from the increased focus on their core competencies and from the flexible use of assets.

* International and Taiwanese EMS and ODM companies will continue increasing their manufacturing capacity in China over the next five years.

* The manufacturing of more products will be transferred to facilities in China by international and Taiwanese EMS companies.

* Local Chinese EMS companies will speed up their moves to enhance their manufacturing capabilities and to expand facilities to attract more overseas customers.

* New local Chinese EMS providers will enter the market, including subsidiaries that split off from large domestic OEMs.

* China’s domestic OEMs gradually will outsource more production to EMS companies.

For more information, visit www.isuppli.com