Contract Manufacturing To Capture 27% Of The Electronics and IT Total Available Market by 2006, According to IDC

FRAMINGHAM, MA – OCTOBER 31, 2002 – Combined, electronics manufacturing services (EMS) and original design manufacturers (ODM) captured 20% of the electronics and IT total available market (TAM) in 2001, according to a new study by IDC. The TAM for contract manufacturing services reached $560 billion for the year.


"The fact that only 20% of the TAM has been outsourced underlines the tremendous opportunity for future growth within the contract manufacturing industry. We expect that contract manufacturing will capture 27% of the TAM by 2006," according to Kevin Kane, program manager for IDC's Contract Manufacturing Services.

The EMS market grew 6.0% in the second quarter of this year. Flextronics held the lead during this quarter with 14.2% of total revenue. Solectron was a close second with 13.8%. Sanmina-SCI held the third spot and had one of the strongest quarters of the top five. IDC believes that the year-over year recovery for the EMS industry began in the third calendar quarter of 2002.

The ODM industry grew to $4.4 billion in the second calendar quarter. Overall, the accelerated growth rate was due to stronger than anticipated notebook production as well as the continued strength of some major consumer product programs. Quanta and Compal are the leading vendors in the segment with 21.8% and 18.5% market share, respectively.

Low-cost production is extremely important within contract manufacturing and pricing is consistently listed by branded vendors as one of the most important factors in contract manufacturing. EMS vendors, in particular, have been working on restructuring plans that would increase the proportion of low- cost production facilities in their global footprints.

"The electronics manufacturing industry is currently seeing a continued trend toward production in mainland China and the Taiwanese ODMs are certainly a part of the trend. High-end projects remain in Taiwan as much of the lower- end production moves to China," said Kane.

IDC's The Worldwide CMS CY 2Q02 Forecast and Analysis update, 2001-2006 (IDC #28141) provides in depth analysis on both the EMS and ODM markets on an annual and quarterly basis. The study is one in a series of quarterly reports that update IDC's annual EMS report entitled A Year of Restructuring: EMS Industry Forecast and Analysis, 2001-2006 (IDC #27227). To purchase this or any other Contract Manufacturing Services document, call IDC's volume sales hotline at 508-988-7988 or email

About IDC

IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and ebusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in- depth analysis, and client interaction, IDC forecasts worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at

IDC is a division of IDG, the world's leading IT media, research and exposition company.

All product and company names may be trademarks or registered trademarks of their respective holders.