Market Segments
The EMS industry is commonly divided into Tiers by their revenue:
- Tier 1: >$800m/1Billion - examples include Foxconn/HonHai (about $50B) (of the famed iPod city scandal), Flextronics (about $35B), Jabil, Benchmark Electronics, and Sanmina-SCI
- Tier 2: $250/300m to $1B
- Tier 3: <$250m
There is no hard rule on the actual revenue designation at this time. Other categories have been suggested by StepBeyond/EMSinsider: Tier 4 <10m and "Tier Mega" referring to the Big 2, Foxconn and Flextronics.
Another distinction is drawn between EMS that specialize in High Mix Low Volume (HMLV) and High Volume Low Mix (HVLM). Mix refers generally to the complexity or different models of the pcb assembly. Volume refers the number of units built, with products like consumer electronics on the high end and prototype, medical electronics or machinery on the low end. Typically, lower Tier EMS provide HMLV and higher Tier provide HVLM.
Today the market is dominated by a handful of companies such as Hon Hai Precision Industries (Foxconn), Flextronics, Celestica, Sanmina-SCI, Jabil, Elcoteq, Onyx EMS, Benchmark Electronics, Plexus, Kimball Electronics Group, Key Tronic Corp and a few dozen others, several thousand smaller companies continue to occupy EMS niches.
During technology's late-1990s heyday, EMS players routinely acquired assets in high-cost locations. EMS players largely focused on printed circuit board fabrication, leaving system assembly to the OEMs. EMS companies largely disdained industries outside the world of information processing (computers) and communications. In recent years, EMS players have shifted production to low-cost geographies; embraced non-traditional industries including consumer electronics, industrial, medical and instrumentation; and added substantial vertical capabilities, stretching from design and ODM through system assembly, test, delivery and logistics, warranty and repair, network services, software and silicon design, and customer service.
EMS have also started to provide design services used in conceptual product development advice and mechanical, electrical and software design assistance. Testing services perform in-circuit, functional, environmental, agency compliance, and analytical laboratory testing. Electronic manufacturing services are located throughout the world. They vary in terms of production capabilities and comply with various quality standards and regulatory requirements.
Read more about this topic: Electronics Manufacturing Services
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