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NORTHBROOK, Ill. - The U.S. contract manufacturing (CM) market increased 21.5 percent in 1999, to $27.4 billion, according to a report from the IPC - Association Connecting Electronics Industries. The report included 66 companies with combined sales of $11.3 billion - 41 percent of the total estimated CM market. Computers and communications continue to be the largest markets for CMs, accounting for 53.4 and 26.8 percent of total 1999 sales, respectively.
The top tier CMs led the way in growth, with 1999 revenues rising 25 percent compared to 1998 (Table). Overall, survey respondents indicated that 66 percent of 1999 sales came from existing business, 23 percent from new business and 11 percent from new customers.
IPC predicts the U.S. CM market will continue to grow more than 20 percent annually (as it has since the late 1980s), topping $59 billion in 2003. According to vice president of industry programs Tony Hilvers, product innovation and the increasing trend to outsource by OEMs are the two major factors contributing to this expected growth. "Whether through acquisition of OEM facilities or increase in business from new or current customers, outsourcing continues to grow," said Hilvers.
Final results are expected to be available in the first quarter of 2000. For more information on the report, 1999 Market for Electronics Manufacturing Services, contact IPC market research analyst John Hassman at (847) 790-5320 or e-mail JohnHassman@ipc.org.