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Palo Alto, Calif. — New analysis from Frost & Sullivan, "China versus Mexico EMS Provider Markets," reveals that the world EMS provider market generated revenues of $92.2 billion in 2002 and is likely to reach $334.7 billion by 2009.
China is emerging as the most preferred low-cost destination for manufacturers across the world with its inexpensive yet educated or skilled workforce. China's relatively high quality of products, rapidly developing infrastructure facilities and untapped domestic market is helping to fuel market expanison.
According to Frost, manufacturing and shipping costs and the level of market fragmentation are key deciding factors in going to China. EMS providers should also consider the prevalence and influence of standards on electronics products. It is critical as some industries — for instance, sensors — have different standards and protocols across the globe, making them more suitable for catering to local market requirements.
Electronics manufacturers, though lured by the overwhelming benefits offered by China, are treading cautiously due to the laxity in strict enforcement of intellectual property protection laws. Widespread reports about the duplication of processes and products by local manufacturers have increased these concerns.
Currently, the Chinese government is working to improving intellectual property protection while expediting its research and development efforts. This is likely to enhance China's attractiveness as a popular low-cost destination while reducing its reliance on Western technology.
Mexico's advantages such as proximity to the United States, stable political relationship between the two countries, reliable and faster shipping, increased research and development capabilities, and tax incentives simply fade in comparison to the remarkable benefits and savings potential offered by China.
"China versus Mexico EMS Provider Markets," part of Frost's EMS Provider Subscription, assesses potential opportunities for North American EMS providers in the Mexican and Chinese markets. The study compares and contrasts these regions through an in-depth examination of drivers, restraints, government regulations and prevailing economic conditions. This information is likely to enable companies to adopt a proactive approach in evaluating and choosing their manufacturing locations and their target markets. Executive summaries and interviews are available to the press.
Frost & Sullivan, an international growth consultancy, has been supporting clients' expansion for more than four decades. For more information, visit electronics.frost.com.