Taipei, Dec. 29, 2008 (CENS)--Without further declining demand for electronics products than expected, the global EMS (electronics manufacturing services) industry will grow only 7.8% in 2009, according to IDC, the premier global provider of market intelligence for the information technology (IT), telecom, and consumer technology markets.

The worldwide EMS industry enjoyed double-digit revenue growth in both 2006 (20%) and 2007 (16%), with such rate expected to be only 9.3% in 2008 (reaching US$291 billion in revenue).

Michael Palma, senior research analyst for electronics manufacturing at IDC, explained that the slower growth rate is the result of decreased demand for PCs and weakened consumer-device segment. "While other segments should also slow significantly, opportunities exist for EMS firms in the industrial sector where OEMs are expected to increase their use of contract manufacturers," he added.

The EMS industry in 2009 is forecast to experience a significant slowdown in end-markets, endangering the prospects of several EMS/ODMs which are facing overcapacity, competition from newcomers in specific market segments, and larger internal issues with their business models and value propositions, according to IDC. Additionally, IDC believes the EMS industry will feel the impact of OEMs` risk aversion and attempts to reduce costs by "in-sourcing" design to differentiate products.

In IDC`s most likely scenario, the EMS industry should achieve an 8.1% compound annual growth rate (CAGR) in 2012 driven by increased outsourcing in the industrial, automotive, and medical device segments, and recovering end-market demand for networking equipment starting in 2010. The computing and consumer device segments, however, would not likely return to the double-digit revenue growth rates that fueled the EMS industry`s recovery from the "dotcom" meltdown, the market-intelligence firm said.

(by Quincy Liang)