Asia to dominate contract electronics market

Led by China, Asia will continue to expand its share of the growing contract electronics manufacturing market, according to new forecasts.

The annual value of the market in Asia will more than double in five years from $121.5bn last year to US$281.8 in 2011, predicts research firm In-Stat.

Contract electronics manufacturers build a wide variety of products for brand name vendors such as Apple, Dell and Microsoft.

While the brands may be famous, the real manufacturers are actually little known names like Jabil Circuit and Quanta Computer.

"OEMs continue to leverage the cost structure of electronics manufacturing services players and outsource their manufacturing to low-cost centres in Asia, " said In-Stat analyst Mayank Jain.

"In key Asian markets, OEMs have persuaded these players to establish their local operations so that they can capitalise on the domestic demand well."

In-Stat expects the fastest growth to come from consumer electronics vendors, with communications in second place.

In-Stat predicts that Asia will grab an increasingly large slice as the market expands, growing from 45 per cent at the end of last year to 55.1 per cent in 2011. Taking the lion's share of this market will be China, at almost 76 per cent, which will be worth more than US$210bn per year.

India, Thailand and Vietnam will also join the ranks of the region's key contract electronics manufacturing players.