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Low-cost Regions Lead Electronics Output
June 6, 2008 |Estimated reading time: 1 minute
MONTREAL Electronics manufacturing in the U.S., Japan, and Western Europe accounted for less than 50% of electronics output for the first time in 2006 as the migration of volume manufacturing to low-cost locations continues, according to "Yearbook of World Electronics Data Volume 2 America, Japan & Asia Pacific 2007," by market analysts at Electronics.ca Publications.
The Asia-Pacific has benefited most from electronics manufacturing's shift to low-cost production areas, with China taking the lion's share. China surpassed the U.S. as the largest electronics producer in 2006.
Between 1995 and 2006, the Asia-Pacific's share of global electronics production has increased from 20% to 42%. During this period, China's share of global electronics production has increased from 3% to 20.5%. This has had a transformative effect on the structure of the global electronics industry, Electronics.ca Publications notes. However, Central and Eastern Europe, Mexico, and Brazil also saw significant inward investment since 2000.
The U.S. remains the world's largest electronics consumer market (26%), but Electronics.ca Publications predicts that many of today's low-cost locations will also offer significant market opportunities, compounding investment in local manufacturing.
In 1995, Western Europe accounted for 21% of global electronics production. By 2000, this had fallen to 18% and in 2007 was estimated to be around 15%. Between 2000 and 2006, electronics output in Western Europe has fallen by an estimated 30% in local currency. Similar to the U.S. and countries in Western Europe, Japan is being impacted by the migration of production to low-cost locations. By the end of 2006, electronics output had fallen by 23.5% from the peak in 2000. Japan's share of global electronics output dropped to 12.7%, down from 26% in 1995. Despite the underlying trends, production stabilized with production rising by 4.0% in 2006 and by a modest 0.6% in 2007.
The outlook for the Indian electronics industry remains positive. Electronics production increased by 22% in 2006, although analysts suspect it slowed slightly in 2007, continuing in 2008. Despite a slight softening, the Indian electronics industry still will show double-digit growth, Electronics.ca Publications reports.
For more information on "Yearbook of World Electronics Data Volume 2 America, Japan & Asia Pacific 2007," visit www.electronics.co/reports.