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InForum's Electronics Forecast Projects 5% Industry Recovery Rate
November 14, 2009 |Estimated reading time: 1 minute
CHICAGO — InForum’s annual Five Year Forecast for the Electronics Manufacturing Industry was released at the Silicon Valley Q4 Forum. Matt Chanoff, chief economist, described both TAM and electronics outsourcing to return to annualized growth of 5% in the next 12 to 24 months following an estimated 9% contraction for 2009. InForum sized the total available market (TAM) for the electronics manufacturing industry at $1.3 trillion in 2008, estimates it to retract to $1.2T in 2009, and predicts growth to reach $1.4T by 2013. InForum sized the EMS industry at $127 billion in 2008, estimates it to retract to $103B in 2009, and forecasts that the industry will grow to $127B again by 2013. The ODM industry was sized at $116B in 2008, $107B for 2009, and forecasted to grow to $135B by 2013. A major influence on this year’s forecast was the manner in which InForum treated the revenues for Foxconn, which for the first time were not all included in the EMS sector, but broken out between the EMS and ODM industries. Chanoff identified the industry segments with the greatest outsourcing growth potential in this area to include automotive, medical, and aerospace and defense (mil/aero). He described demand drivers for the overall industry and outsourced manufacturing specifically to support the current projections and the forecasting process he leads for InForum. Eric Miscoll, senior analyst and contributing member of the InForum Forecasting team, examined the regional implication of the recession and projected recovery. According to Miscoll, “The regional footprint for electronics manufacturing continues its shift towards Asia, although somewhat less aggressively than in past years. This shift is driven by low labor costs, the large amount of available capacity existing in Asia, and ODMs diversifying into new sectors such as automotive and medical, among other issues. Mitigating the shift to Asia is the rising cost of labor in China, OEM insourcing, and greater consideration of total cost of ownership in outsourcing decisions.” For more information, visit www.InForuminc.com.