Outsourcing to provide significant market opportunities

Despite significant restructuring following the downturn in 2002 and 2003 the European contract electronic assembly industry remains one of the most important sectors within the electronics market.

Following the recovery in 2004 the West European CEM industry, according to the latest research from Reed Electronics Research, will expand from €19.7bn to €47.1bn by 2009.

The advantage Eastern Europe offers in terms of cost savings will result in the region experiencing stronger growth with CEM industry reaching €11bn by 2009, up from an estimated €4bn in 2004.

Although the underlying trends which are driving the move to outsourcing will continue and underpin strong growth the structure of the European CEM industry will continue to evolve.

In 2004 the industry was still dominated by the leading 10 companies, accounting for an estimated 58 per cent. However, their dominance has receded as the major tier one Companies scale down their production activities in Western Europe.

In 2002 the top 10 accounted for some 66 per cent of the European CEM market. Europe’s strength in automotive and industrial, including medical, has helped the small to medium sized European CEMs, and in particular those companies specialising in low-volume high-mix assembly, to report healthy growth.

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