lectronic Manufacturing Industry: Market Research Reports, Statistics and Analysis

Global Electronics Manufacturing Industry

The global electronics manufacturing industry involves the assembling of electronic goods for domestic, professional, State and military use. Electronics are also used in other industries in the manufacture of a range of goods including appliances, vehicles and toys. Manufacturing companies can be broken down into categories according to what they produce. The main categories of products include: equipment used in the fields of telecommunications, engineering, laser processing, photography and medicine, machinery components, lighting and consumer electronics. Manufacturing companies are obliged to deal with other manufacturers as much of the raw materials they use involves intermediate components. Apart from nurturing a strong business relationship, these companies often locate near one another to cut transport and inventory costs and to afford smooth collaboration for research and development. One such example is Silicon Valley in California where a cluster of companies operates in close proximity to manufacture software and computers. The global electronics manufacturing industry is comprised of relatively small companies for the most part. Electronics products are becoming cheaper and being produced faster thanks to the industrys supply chain, which is becoming more and more globalized. Much of the electronic goods manufactured by the industry come from Asia, with China the number one country in terms of production. Outsourcing is common amongst US electronics manufacturers, allowing them to capitalize on profits by cutting production costs. The industry relies on technological innovation, with heavy investment in research and development projects involving highly qualified engineers and technical experts. An increasing degree of automation is making the production of electronics equipment faster and helping to keep the pace of production up with that of constantly evolving designs.

Key Segments

The global consumer electronics industry has an estimated worth of close to $7 trillion, according to Business Insights. This highly competitive industry is seeing extensive convergence of market, products and technologies, fuelled by miniaturization, digitalization, and mobility. The global electronic manufacturing services industry is expected to grow by almost 9% yearly throughout the five-year period ending in 2015, according to MarketLine, at which point the market would be worth almost $300 billion. Most electronic equipment manufacturers are at the service of original equipment manufacturers. Electronics materials and chemicals refer to substances necessary to make printed circuit boards and semiconductors, and exist in liquid, gaseous, and solid forms. According to BCC Research, demand for these substances will enjoy an annual growth rate in excess of 12.5% through 2015.

Regional Market Share

The EU electronic manufacturing services industry is expected to grow by almost 6.5% in 2011, with a lower rate inferior to 3% in Western Europe, and a higher rate of over 9% in Central & Eastern Europe, according to Reed Electronics Research. The region comprised of Central and Eastern Europe and other is expected to represent 60% of overall EU electronic production by 2015, a 3% increase compared with 2010.

Industry Leaders
Samsung and Hewlett-Packard are two important players in the electronics industry. Samsung had net sales of almost $173 billion in 2010, with assets worth around $295 billion. California-based Hewlett-Packards customer base is over one billion, and it operates in over 170 countries. The company employs almost 325,000 people worldwide, and was number 11 in the 2010 list of Fortune 500 companies. Its 2010 revenue was in excess of $125 billion. Other leading companies on the global electronics manufacturing market include Sony, LG, Toshiba, Nokia, Panasonic, Apple, Microsoft and Dell.

Market Outlook
As the electronic manufacturing industry is increasingly globalized, with US companies outsourcing factory activities abroad, it is difficult to delineate company boundaries; design, manufacture and assembly of products can span three different countries. The industry is driven by technological innovation, with cost competitiveness proving to be a key factor. According to private research firm Business Insights, South Korean companies LG and Samsung are fuelling commoditization of the industry, with other companies striving to hold their own in the face of these emerging corporate powers. Japanese competitors are looking to diversification into fields such as environment and energy to stimulate growth. Apple, on the other hand, is managing to keep its profits high through the tactic of disruptive innovations.

Leading Industry Associations

Electronics Components Association http://ec-central.org Consumer Electronics Association www.ce.org Global Standards for the Microelectronics Industry www.jedec.org Global Electronics Trade Association www.ipc.org American Engineering Association www.aea.org Institute of Electrical and Electronic Engineers www.ieee.org National Electrical Manufactures Association www.nema.org Exports General Imports General Imports Consumption Imports

Consumption

F.A.S.Value Basic Electronic Computers Computer Storage Devices Other Computer Equipment Telephone Apparatus Radio and Television Broadcasting And Wireless Communications Equipment Other Communications Equipment Audio and Video Equipment Picture, Microwave, Amplifier, Electron, Cathode Ray & Similar Tubes Printed Circuits Semiconductors and Related Devices Electronic Capacitors and Parts Electronic Resistor And Parts Electronic Coils, Transformers, and Other Inductors Electronic Connectors Printed Circuit Assemblies (Electronic Assemblies) Other Electronic Components Electromedical and Electrotherapeutic Apparatus Search, Detection, Navigation, Guidance, Aeronautical, and Nautical Systems and Instruments Automatic Environmental Controls for Residential, Commercial, and Appliance Use Instruments and Related Products for Measuring, Displaying, and Controlling Industrial Process Variables Totalizing Fluid Meters And Counting Devices Instruments For Measuring And Testing Electricity And Electrical Signals Analytical Laboratory Instruments Irradiation Apparatus Watches, Clocks, and Parts Other Measuring and Controlling Devices Prerecorded Compact Discs (except Software), Tapes, and Records Unrecorded Magnetic and Optical Media Total << Minimize 11,810,560 4,783,116 23,102,553 774,602 24,838,205 599,014 8,621,767 276,918 1,412,310 37,660,442 1,308,666 558,277 595,505 3,992,503 523,787 5,390,837 8,369,603 3,196,887 360,697 6,163,388 303,552 6,289,788 6,820,967 3,406,620 873,934 3,521,826 186,042 424,368 166,166,731

Customs Value Basis C.I.F Value Basis 48,172,292 8,458,859 23,129,838 2,352,102 68,338,947 817,189 32,715,020 291,207 1,607,844 32,503,933 1,069,487 725,712 922,881 3,265,686 11,604,077 9,311,696 6,994,181 4,576,939 792,051 5,929,185 395,27 5,003,719 4,521,574 3,100,890 3,793,676 1,701,209 112,569 964,633 283,172,669 49,101,153 8,679,485 23,663,930 2,401,730 69,094,278 830,788 33,175,523 294,626 1,674,740 32,781,463 1,089,878 743,106 951,333 3,348,553 11,759,397 9,559,909 7,070,181 4,627,735 803,935 6,035,233 402,646 5,086,918 4,594,299 3,143,250 3,870,904 1,731,691 119,299 995,258 287,631,238

Customs Value Basis 48,085,058 8,462,698 23,538,084 2,345,304 67,991,190 818,092 32,513,530 291,194 1,582,149 32,477,055 1,102,614 722,334 913,084 3,240,595 11,595,749 9,092,878 6,966,246 4,400,023 784,466 5,789,813 394,9 5,000,959 4,505,424 3,092,710 3,368,138 1,699,310 112,567 970,088 281,856,250

C.I.F Value B 49,011,792 8,684,553 24,072,102 2,397,828 68,846,595 831,777 32,976,686 294,613 1,648,714 32,756,796 1,123,079 739,63 941,295 3,322,967 11,749,528 9,332,909 7,042,035 4,448,619 796,224 5,891,121 402,256 5,083,581 4,577,618 3,135,008 3,429,975 1,729,694 119,296 1,002,759 286,389,050

The purpose of a SWOT analysis of the manufacturing industry is to identify the key factors that affect the success of the industry. The four factors considered a part of a SWOT analysis are: strengths, weaknesses, opportunities and threats. A SWOT analysis estimates the risks for a particular industry.

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Strengths
o
The strengths of the manufacturing industry are that it is relatively stable. Although the demand for manufacturing tends to fluctuate with the ups and downs of the economy, it is characterized by regular periods of

recovery following any downturns. Moreover, manufacturing has become highly efficient over the last century, with the ability to maximize both the productivity of the workers and machines to maximize profits.

Weaknesses
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A weakness of the manufacturing industry is that much of it is built on the production of non-essential goods. This means that a severe downturn in the economy can have a crippling effect on it. Another weakness is that it is a mature industry. This means that there is heavy competition and little room for growth. As a result, the manufacturing industry can be a cash cow for those who are already in it but may be unattractive to new entrants.

Opportunities
o
Opportunities in the manufacturing industry are in the technology and bio-technology areas. These are growing market segments with higher profit margins. Additionally, they are knowledge-dependent market segments that require highly specialized workers, which makes it difficult for low wage countries to compete in this market segment, thereby providing an edge to more industrialized countries. Foreign markets with a growing middle class are providing opportunities for technology and bio-technology manufacturers to increase their profitability through exports.

Threats
o
The largest threats to the manufacturing industry in developed nations are from low wage countries. The low wages of these countries have made it impossible for many businesses in developed nations to compete, requiring them to either close or move overseas to find cheap labor. Increasingly, India is an even bigger threat to the manufacturing industry, with its ability to supply highly educated workers at low wages to fill roles in the hightech manufacturing market segment.

Warning
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Be aware that a SWOT analysis of the manufacturing industry does not necessarily reflect the position of your firm within the industry. It is recommended that you conduct a SWOT analysis of your particular manufacturing firm to understand the strengths, weaknesses, opportunities and threats inherent to your business. It is possible that your firm could be in a stronger position than the manufacturing industry as a whole or that it could be much worse off.