Every supplier wishes it would stabilize, yet it does not.  The worst hit is the equipment suppliers who are whipped by the combination of end user demand and OEM manufacturer whims concerning predicted fulfillment.  The chain reaction of supply series makes this boom/bust scenario chaotic and excessive in terms of forecasting revenue.  It is often an accumulative effect in which the tail-end of the chain gets whacked the most – usually the equipment/manufacturing guys, while the distributors and EMS suppliers get left with excess or deficient inventory.

This is all specific to product industries – things like PCs, notebooks, LCD monitors/TVs, set-top boxes and video console games, just to mention a few.  To be sure, the OEMs are their own worst enemies – that is, they hedge against upside demand and over-predict against down-side supply – to their, and their supplier’s demise.  Yet, who can claim to be accurate and wise after the fact?  As a forecaster, I can truly claim that when we are spot-on, it is sheer luck, and when we are wildly off, we simply hide undercover until the storm passes.

One hopes that time will provide wisdom and sanity to such swings of prediction.  Yet, there are always new and emerging pundits willing to state an option as to the market trends.  Who to believe – the experienced or the lucky prognosticator?

We try and integrate the knowledge gained from watching such cycles time and again with our current forecasts.  Conservatism seems to pay dividends, yet we have often been wrong, regardless.  Sometimes we have been astoundingly accurate – shockingly – yet we know that we must attribute it to luck.

A few examples can make this point.  In 2000, when the market was booming, we accurately predicted the growth of the electronic manufacturing services (EMS) market to a very concise degree, however, this was because it was exploding and there seemed to be no end in sight.  When the downturn arrived, it was very embarrassing to revise our forecasts, chagrined with the entire industry downturn.  Similarly, we expected a solid 2009 year without the unpredicted contraction.  We lick our wounds and beg for forgiveness and forgetfulness.

Yet, who could know?  Such cyclic cycles exist that seem to beyond our awareness.  The Center for Cyclic Studies is well aware of this, if you believe in such things as planetary or cosmic/organic cycle studies.  It is a fascinating organization, that examines not just economic cycles, but other systemic cycles in nature and life that seem to follow patterns that go outside our predictive natures.  I can’t say that I agree with all these predictions, but I am interested in them in so far as they help us to understand our businesses.

The Foundation for the Study of Cycles makes this bold statement, “Cycles are meaningful, and all science that has been developed in the absence of cycle knowledge is inadequate and partial. …any theory of economics, sociology, history, medicine, or climatology that ignores non-chance rhythms is as manifestly incomplete as medicine was before the discovery of germs.” – Edward R. Dewey[1], Harvard Economist – 1967.

Cyclic prizes have been awarded for solar and lunar cycles in the ‘El Nino’ which correspond the droughts in Northeastern Brazil, Morrocco and the American Southwest, specific markets, economics, and forecast turning points in the international business cycle, and even go so far as to predict the systematic cycles of war, cycles of tree ring widths, weather forecasting, biophysical science, civil violence, insurance, motivation and yes, corporate lifecycles!  It can all become a little esoteric when it comes down to biocybernetics and new option markets, but so it goes.

Coming back to earth, cycles do exist and seem to re-occur.  In electronics it seems to be one of boom and bust, much to the consternation of the participants.  Yet, growth endures and we look forward to new gains every year.  In this regard, I can positively predict that the EMS, electronics assembly market and corollary industries will continue to grow, albeit at varying rates.  The recession cycles are the most disturbing and unpredictable.

I am not advocating cyclic studies to help us understand the economics of electronic manufacturing.   Yet, it is something we must consider in the larger context of things.  Macroeconomic cycles are real despite our subtle denial.  I wish we were able to harness them better to help us in our work.  In the meantime, we will try our best to work with our best knowledge, intellect and intuition to help our clients to predict future product demand.  Otherwise, suppliers must rely on their own intelligence, and where does that come from?   Is it best guess, economic indicators, prognosticators – cyclic studies?  We would be silly to promote such a view as cyclic studies, yet it introduces a fascinating dimension to a world that has not been completely proven.

New Venture Research continues to monitor the emerging electronics industries with reserve and hope.  Please feel free to contact us concerning your concern.

New Venture Research (NVR) has followed the electronics assembly industry for over 20 years with its research reports that focus on all aspects of this industry. The Worldwide OEM Electronics Assembly Market – 2011 Edition is a peerless database that analyzes the 2010 electronics assembly market on a worldwide basis. It is developed by studying almost 300 leading OEM electronics companies in 48 different product categories and their manufacturing activities in 44 different countries.  Moreover, the report examines the electronics assembly market by outsourced subcontractor versus in-house assembly by the OEM company.

The report segments the worldwide electronics assembly value into seven unique markets.

• Automotive
• Communications
• Computers/Peripherals
• Consumer Electronics
• Industrial
• Medical
• Aerospace/Military/Other

The following production data is given for the leading OEMs within each product/market segment.

• COGS Assembly Revenue
• Electronics COGS Assembly Revenue
• Outsourced/In-Housed Assembly Revenue
• Assembly Revenue by 44 Countries
• Assembly Revenue by 48 Products

The leading OEMs for each segment are chosen not only for their size, but also for their leadership within their industry segment, growth potential, profitability, and inclination to outsource electronics assembly.
The Worldwide OEM Electronics Assembly Market – 2011 Edition is delivered by email as a single-user Excel file and sells for $2,995. An extra single-user license is $250 and a corporate license is $1,000.

Database Tables

Worksheet 1: Automotive

• Automotive Engine Controls
• Automotive Instruments
• Automotive Safety
• Automotive Entertainment
• Total Automotive
• Automotive Summary

Worksheet 2: Communications

• Mobile Phones Infrastructure
• Other Phones
• Enterprise LANs
• Wireless LANs
• DSL/Cable Modems
• PBX/Key Systems
• Carrier-Class Equipment
• Other Communications
• Total Communications Summary

Worksheet 3: Computer/Peripherals

• Notebooks
• Desktops
• Tablets
• Servers
• Workstations
• ESS
• Monitors
• Printers
• E-Readers
• Other Computer
• Total Computer Summary

Worksheet 4: Consumer Electronics

• Analog TV
• Digital TV
• MP3
• Other Audio
• Games
• Set-Top Boxes Camcorders
• DVD/DVR
• Digital Cameras
• Personal Navigation
• Other Consumer
• Total Consumer Summary

Worksheet 5: Industrial

• Process Control
• Test & Measurement
• Other Industrial
• Total Industrial Summary

Worksheet 6: Medical

• Monitoring
• Therapeutic
• Diagnostics/Surgical
• Total Medical Summary

Worksheet 7: Aerospace/Military/Other Transportation

• In-Flight Entertainment
• Navigation Systems
• Weapons
• C3 Systems
• Other Military
• Other Aerospace/Other
• Total Aerospace/Military/Other Summary

Worksheet 8: Americas

• Total Production Assembly Value by Country
• EMS Assembly Value by Country
• In-House Assembly Value by Country
• Total Assembly Value by Market Segment/Product

Worksheet 9: EMEA

• Total Production Assembly Value by Country
• EMS Assembly Value by Country
• In-House Assembly Value by Country
• Total Assembly Value by Market Segment/Product

Worksheet 10: APAC

• Total Production Assembly Value by Country
• EMS Assembly Value by Country
• In-House Assembly Value by Country
• Total Assembly Value by Market Segment/Product

Worksheet 11: World Total

• Total Production Assembly Value by Country
• EMS Assembly Value by Country
• In-House Assembly Value by Country
• Total Assembly Value by Market Segment/Product

Partial List of Companies Profiled

• 3M Healthcare
  ABB
  Abbott Labs
  Acer
  ADC
  Adtran
  Advantest
  Agfa-Gevaert
  AgilentAirbus
  Aisin Seiki
  Alcatel-Lucent
  Alcon
  Alps Electric
  ALSTOM
  Amtran
  Apple
  Applied
  Arcelik
  ARRIS
  ASMLASUS
  AUO
  Autoliv
  Avaya
  B. Braun
  BAE Systems
  Baldor Electric
  Bang & Olufsen
  Baxter
  Beckman Coulter
  Becton Dickenson
  Boeing
  BombardierBosch Group
  BOSE
  Boston Scientific
  Brocade
  Brother Ind.
  CR Bard
  Canon
  Carl Zeiss
  Casio
  Caterpillar
  Changhong
  China Putian
  Ciena
  Cisco
  Compal
  Comverse
  CONMED
  Continental
  Covidian
  Daimler
  Danaher
  Datang
  DaVita
  Dell
  Delphi
  Denso
  Diebold
  D-Link
  Dragerwerk
  EADS
  Eastman Kodak
  Eaton
  Echostar
  Electrolux
  Embraer
  EMC
  Emerson
  Epson
  Ericsson
  Extreme Networks
  Founder
  Fresenius
  Fuji
  Fujitsu
  Funai
  Garmin
  General Dynamics
  GE Healthcare
  Great Wall
  Haier
  Harmon Intl.
  Harris
  Hella
  Hewlett-Packard
  Hisense
  Hitachi
  Honda
  Honeywell
  HTC
  Huawei
  Hyundai
  IBM
  IGT
  Ingersoll
  Invensys
  ITT Industries
  Johnson & Johnson
  Johnson Controls
  Juniper
  JVC
  Kawasaki
  Kenwood
  KLA Industries
  Konica Minolta
  Konga Group
  Kyocera
  L-3
  Lagardere
  Lenovo
  Lexmark
  LG Electronics
  Lite-On
  Lockheed
  Logitech
  Magna Intl.
  Matsushita
  Medtronic
  Microsoft
  MicroStar
  MiTac
  Mitel
  Mitsubishi
  Motorola
  NCR
  NEC
  Nikon
  Nintendo
  Nokia
  Nokia-Siemens
  Nortel
  Northrop Grumman
  Oce
  Oki Electric
  Olympus
  Omron
  Option
  Oracle
  Pace
  Panasonic
  Panda Electronics
  Philips Medical
  Pioneer
  Pitney Bowes
  Polycom
  Q-Logic
  Quanta
  Radio Shack
  Raytheon
  Redstone
  ResMed
  Ricoh
  RIM
  Rockwell
  Samsung
  Sanyo
  Schneider Electric
  Seagate
  Sega
  Sharp
  Siemens Healthcare
  Smiths Group
  Sony
  Sony Ericsson
  Spirent
  St. Jude Medical
  Tatung
  TCL
  Thales
  Thomson
  Thyseen Krup
  Tokyo Electron
  Toshiba
  TRW
  Tyco
  United Technologies
  UTStarcom
  Valeo
  Varian Medical
  Visteon
  Vtech
  Western Digital
  Wincor Nixdorf
  Xerox
  Yamaha
  ZTE

New Venture Research (NVR) has followed the electronics assembly industry for over 20 years with its research reports that focus on all aspects of this industry. The Worldwide OEM Electronics Assembly Market – 2011 Edition is a peerless database that analyzes the 2010 electronics assembly market on a worldwide basis. It is developed by studying almost 300 leading OEM electronics companies in 48 different product categories and their manufacturing activities in 44 different countries.  Moreover, the report examines the electronics assembly market by outsourced subcontractor versus in-house assembly by the OEM company.

The report segments the worldwide electronics assembly value into seven unique markets.

• Automotive
• Communications
• Computers/Peripherals
• Consumer Electronics
• Industrial
• MedicalAerospace/Military/Other

The following production data is given for the leading OEMs within each product/market segment.

• COGS Assembly Revenue
• Electronics COGS Assembly Revenue
• Outsourced/In-Housed Assembly Revenue
• Assembly Revenue by 44 Countries
• Assembly Revenue by 48 Products

The leading OEMs for each segment are chosen not only for their size, but also for their leadership within their industry segment, growth potential, profitability, and inclination to outsource electronics assembly.

Randall Sherman, president of New Venture Research Corp., a California market research and business consulting firm focused on the EMS and OEM electronics manufacturing industries, serves as principal analyst for this database. Mr. Sherman has more than 20 years’ experience in technology and business research. He began his career as a telecom network design engineer. He has held senior positions at various market research firms, including Creative Strategies and Frost and Sullivan. Mr. Sherman holds an MSEE from the University of Colorado and an MBA from the Edinburgh School of Business.

Worksheet 1: Automotive

• Automotive Engine Controls
• Automotive Instruments
• Automotive Safety
• Automotive Entertainment
• Total Automotive
• Automotive Summary

Worksheet 2: Communications

• Mobile Phones Infrastructure
• Other Phones
• Enterprise LANs
• Wireless LANs
• DSL/Cable Modems
• PBX/Key Systems
• Carrier-Class Equipment
• Other Communications
• Total Communications Summary

Worksheet 3: Computer/Peripherals

• Notebooks
• Desktops
• Tablets
• Servers
• Workstations
• ESS
• Monitors
• Printers
• E-Readers
• Other Computer
• Total Computer Summary

Worksheet 4: Consumer Electronics

• Analog TV Digital TV MP3
• Other Audio
• Games
• Set-Top Boxes Camcorders
• DVD/DVR
• Digital Cameras
• Personal Navigation
• Other Consumer
• Total Consumer Summary

Worksheet 5: Industrial

• Process Control
• Test & Measurement
• Other Industrial
• Total Industrial Summary

Worksheet 6: Medical

• Monitoring
• Therapeutic
• Diagnostics/Surgical
• Total Medical Summary

Worksheet 7: Aerospace/Military/Other

• In-Flight Entertainment
• Navigation Systems
• WeaponsC3 Systems
• Other Military
• Other Aerospace/Other
• Total Aerospace/Military/Other Summary

Worksheet 8: Americas

• Total Production Assembly Value by Country
• EMS Assembly Value by Country
• In-House Assembly Value by Country
• Total Assembly Value by Market Segment/Product

Worksheet 9: EMEA

• Total Production Assembly Value by Country
• EMS Assembly Value by Country
• In-House Assembly Value by Country
• Total Assembly Value by Market Segment/Product

Worksheet 10: APAC

• Total Production Assembly Value by Country
• EMS Assembly Value by Country
• In-House Assembly Value by Country
• Total Assembly Value by Market Segment/Product

Worksheet 11: World Total

• Total Production Assembly Value by Country
• EMS Assembly Value by Country
• In-House Assembly Value by Country
• Total Assembly Value by Market Segment/Product

Partial List of Companies Profiled

• 3M Healthcare
• ABB
• Abbott Labs
• Acer
• ADC
• Adtran
• Advantest
• Agfa-Gevaert
• AgilentAirbus
• Aisin Seiki
• Alcatel-Lucent
• Alcon
• Alps Electric
• ALSTOM
• Amtran
• Apple
• Applied
• Arcelik
• ARRIS
• ASMLASUS
• AUO
• Autoliv
• Avaya
• B. Braun
• BAE Systems
• Baldor Electric
• Bang & Olufsen
• Baxter
• Beckman Coulter
• Becton Dickenson
• Boeing
• BombardierBosch Group
• BOSE
• Boston Scientific
• Brocade
• Brother Ind.
• CR Bard
• Canon
• Carl Zeiss
• Casio
• Caterpillar
• Changhong
• China Putian
• Ciena
• Cisco
• Compal
• Comverse
• CONMED
• Continental
• Covidian
• Daimler
• Danaher
• Datang
• DaVita
• Dell
• Delphi
• Denso
• Diebold
• D-Link
• Dragerwerk
• EADS
• Eastman Kodak
• Eaton
• Echostar
• Electrolux
• Embraer
• EMC
• Emerson
• Epson
• Ericsson
• Extreme Networks
• Founder
• Fresenius
• Fuji
• Fujitsu
• Funai
• Garmin
• General Dynamics
• GE Healthcare
• Great Wall
• Haier
• Harmon Intl.
• Harris
• Hella
• Hewlett-Packard
• Hisense
• Hitachi
• Honda
• Honeywell
• HTC
• Huawei
• Hyundai
• IBM
• IGT
• Ingersoll
• Invensys
• ITT Industries
• Johnson & Johnson
• Johnson Controls
• Juniper
• JVC
• Kawasaki
• Kenwood
• KLA Industries
• Konica Minolta
• Konga Group
• Kyocera
• L-3
• Lagardere
• Lenovo
• Lexmark
• LG Electronics
• Lite-On
• Lockheed
• Logitech
• Magna Intl.
• Matsushita
• Medtronic
• Microsoft
• MicroStar
• MiTac
• Mitel
• Mitsubishi
• Motorola
• NCR
• NEC
• Nikon
• Nintendo
• Nokia
• Nokia-Siemens
• Nortel
• Northrop Grumman
• Oce
• Oki Electric
• Olympus
• Omron
• Option
• Oracle
• Pace
• Panasonic
• Panda Electronics
• Philips Medical
• Pioneer
• Pitney Bowes
• Polycom
• Q-Logic
• Quanta
• Radio Shack
• Raytheon
• Redstone
• ResMed
• Ricoh
• RIM
• Rockwell
• Samsung
• Sanyo
• Schneider Electric
• Seagate
• Sega
• Sharp
• Siemens Healthcare
• Smiths Group
• Sony
• Sony Ericsson
• Spirent
• St. Jude Medical
• Tatung
• TCL
• Thales
• Thomson
• Thyseen Krup
• Tokyo Electron
• Toshiba
• TRW
• Tyco
• United Technologies
• UTStarcom
• Valeo
• Varian Medical
• Visteon
• Vtech
• Western Digital
• Wincor Nixdorf
• Xerox
• Yamaha
• ZTE

The Worldwide OEM Electronics Assembly Market – 2011 Edition will provide you with critical information you need on this significant market. The database is delivered by email as a single-user Excel file and sells for $2,995. An extra single-user license is $250 and a corporate license is $1,000.

New Venture Research is scheduled to release its definitive report on the EMS industry in July, 2011.  The following is a summary of the research findings.

The overall market for electronic components (semiconductors, passives, connectors, etc.) recovered strongly in 2010 and remains more stable throughout the forecast period as a result of resumed demand for manufactured electronics products. NVR expects overall market growth to remain reasonably healthy over the next five years, barring another unexpected downturn.  Figure 1 presents the worldwide electronics assembly forecast for 2010–2015.

Figure 1 – Worldwide Electronics Assembly Market ($B), 2010-2015

Consumer, communications, and computer products will continue to be the leading segments driving the largest growth of the electronics industry. In 2015, the total industry is expected to exceed $1.4 trillion in annual assembly value (COGS), as consumption and replacement of electronic products continues and new products fuel demand. Outsourcing has become a critical element in keeping the electronics assembly industry expanding and driving costs to the margin each year—a leading attribute in stimulating continuous consumer demand. The trend to move price-sensitive manufacturing to low-cost regions will impact the manufacturing footprint in the future market for all suppliers.

Figure 2 compares the worldwide EMS market by region for 2010 and 2015. The shift in production to low-cost regions is starting to wane. Today, we are seeing OEM customers requiring their EMS partners to manufacture products near the regions where they are to be sold. For certain high-volume products like mobile phones and PCs, OEMs need to leverage the lowest cost in manufacturing. However, for other products the labor cost differentials are becoming less significant when weighed against the total cost of production (including transportation and logistical challenges). Offshore product migration will still take place, according to NVR’s forecasts, but it will be at a more moderate pace.

Figure 2 – EMS Market by Region, 2010 & 2015

Figure 3 compares the worldwide EMS market by market segment for 2010 and 2015. Both CMs and ODMs will experience the strongest growth from production in the consumer, communications, and medical equipment markets. Specifically, CMs will find very strong growth in personal navigation, digital television, and cellular infrastructure, while ODMs are projected to experience very strong growth in enterprise storage systems, personal navigation systems, and set-top boxes. In general, CMs will tend to excel in technology-intensive product areas and complex board assemblies. ODMs excel in manufacturing commodity/high-volume products such as motherboards, monitors, handhelds, and consumer electronics.

Figure 3 – EMS Market by Segment, 2010 & 2015

Table 1 ranks the top ten overall EMS companies by revenue for 2010. Foxconn continued its extraordinary dominance as the leading CM in the industry, outdistancing its closest contender by almost 4 times. Flextronics remained steadfastly in the number-two position, followed by two ODMs (Quanta Computer and Wistron).  Jabil Circuit dropped to fifth position followed by five leading ODMs.

Table 1 – Ten Leading EMS Firms by Revenue ($M), 2010

Although a simple ranking of EMS companies by revenue is informative, there are many other meaningful financial measures of EMS performance. To summarize these measures, this report uses a total performance rating based on a weighting of these other measures. The EMS companies having the highest total scores were deemed the best performing companies in the EMS industry; conversely, those companies having the lowest total scores were viewed as the worst performing EMS companies for 2010. Table 2 lists the five highest rated companies in the EMS industry in 2010.

In 2010, HTC emerged as the EMS company with the highest total score, followed fairly closely by Wistron according to NVR’s financial performance metrics. Note that all of these high-performing EMS companies were ODM Asian manufacturers.

Table 2 – Five Highest Rated EMS Companies, 2010

The Worldwide Electronics Manufacturing Services Market, 2011 Edition is the product of thousands of hours of research. The report sells for $2995, with extra single-user licenses at $250 (contact us concerning corporate licensing). This report is only available in PDF format and is delivered by email.  With the purchase of the report, an Excel spreadsheet of all tables and a PowerPoint presentation highlighting key findings may also be obtained for an additional $500 each.  For more information see www.newventureresearch.com/

The semiconductor industry has been cyclical since its inception, but the general trend for the industry is upward. The downturn of 2009 reversed itself by the second half of the year, catapulting the industry into a year of tremendous growth in 2010.

The recently released report, The Worldwide IC Packaging Market, 2011 Edition, offers an in-depth look at the worldwide integrated circuit (IC) packaging market. Forecasts of units, revenue, and ASP for individual IC device markets are provided from 2010 through 2015. The package solutions for each of these markets are then forecast, broken down into I/O ranges. In a separate chapter, the package types are first combined to deliver an overall worldwide forecast of IC packages, then divided into 12 different package families, plus bare die solutions. The major package families include:

•   Dual in-line package (DIP)

•    Small outline transistor (SOT)

•    Small outline (SO)

•    Thin small outline package (TSOP)

•    Dual flat pack no lead (DFN)

•    Chip carrier (CC)

•    Quad flat pack (QFP)

•    Quad flat pack no lead (QFN)

•    Pin grid array (PGA)

•    Ball grid array (BGA)

•    Fine-pitched ball grid array (FBGA)

•    Wafer-level package (WLP)

Additionally, unit forecasts for die mounted using direct chip attach (DCA) methods were developed. DCA methods include chip on board (COB), flip chip on board (FCOB), chip on glass (COG), flip chip on glass (FCOG), and tape automated bonding (TAB)/tape carrier package (TCP).

Packaging revenue is derived by multiplying worldwide units with pricing information supplied by contract IC package assemblers.

The contract IC packaging market forecast is supplied in a separate chapter. Units and revenue are analyzed by package family. Forecasts are computed by compiling information obtained from each individual contract assembly company. Pricing information is provided by I/O count and price per I/O, and when multiplied by units, yields revenue. Profiles of individual contract IC package assemblers are provided.The report contains a chapter on the state of the industry.

The purpose of the report is to aid companies associated with the IC packaging market in forecasting demand for their own products. The IC packaging market is evolving to keep pace with other changing markets. IC packaging demand is affected by changes in the die contained in the packages, and by performance expectations of the final product purchased at the consumer level. Through extensive primary and secondary research, this report presents an objective look at the world of IC packaging.

For more information, see www.newventureresearch.com, or contact Karen Williams, at kwilliams@newventureresearch.com/

The total General Lighting market, including lamps, ballasts, controls and fixtures is today approxomately $55B and is expected to grow to $73B by 2015, an annual rate of 6%. The leading market segments are residential (42%), commercial (23%), industrial (12%) and outdoor (23%). Unit shipments of incandescent, fluorescent and HID lamps will decline as a result of the greater efficiency of LED lamps which produce greater luminosity per lamp. Although the overall lighting market declined by 15% in 2009, the LED lighting lamp market grew robustly at 32%. In 2010, the market started to see major outdoor area and commercial retrofit adoptions using LED modules, pushing LED penetration of General Lighting to a little above 2% of the total market. Products are still highly variable in terms of quality, but improving rapidly.

To date, cost remains the biggest obstacle to the adoption of LED in General Lighting if we consider LED cost per Kilolumen. Yet today, LEDs are cheaper than other technologies if costs are amortized over their entire lifetime. Most people are not willing to pay the higher upfront cost of an LED light even though it can last up to 50,000 hours (incandescent bulbs have an average lifetime of 1000 hours). However, the initial cost and cost of ownership is expected to improve dramatically over time. Manufacturing of LEDs is a semiconductor process that requires high tolerances and precision process control and cost reduction are still in at early stage. Board assembly for LED light bulbs is highly automated, but still involves a considerable amount of manual labor for attaching components, heat syncs and optics. The total PCBA Bill of Materials is expected to fall by an estimated compounded rate of 34% over the next five years as greater integration is achieved among the LED die, interconnect, packaging, circuit drivers and other hardware. Box assembly costs, including ordinary materials such as glass, plastic, reflectors and metal base, will not decline nearly as sharply.

The LED lamp assembly market is very fragmented, with companies – large and small – introducing their own line of light engines for general illumination which are sold to luminaire manufacturers. Many suppliers, mostly Asian, tend to eliminate margin from finished products in an attempt to establish market share. Strong unit growth and declining ASPs combine to generate positive revenue growth, but solid earnings are difficult to achieve. Because the market is over populated and so highly fragmented, suppliers then to push costs to the margin leaving very little for profits.  There has been a slow trend toward consolidation, generally resulting in a loose collection of smaller divisions that cater to different application segments. Only multinational companies like Philips, Osram, General Electric, Panasonic, Toshiba, NEC and Hitachi are quickly building manufacturing scale and process discipline. LEDs are expected to emerge as the dominant lighting technology beginning sometime in 2015.

Though designed for local markets, the manufacturing of mass produced SSL fixtures is being increasingly outsourced to low-cost manufacturers in geographies such as China, Vietnam, India and Bangladesh. There are hundreds of Chinese / Taiwanese and Japanese LED suppliers that are looking for manufacturing scale and distribution. Outsourcing seems to be only attractive for export, except among leading manufacturers / suppliers.

• Taiwanese LED chip companies like Epistar are already following a foundry type strategy. Other LED makers, such as Cree and Seoul Semiconductors, are trying to extend their business by reaching further down the value chain into the LED modules and fixtures markets.
• The Japanese are very active in the LED chip business as well as partnering with OEMs such as Nichia, Panasonic, Sharp, Stanley and Toshiba. Panasonic in China obtains the LED light source in the USA, and sends it to Chinese factories for assembly, which is cheaper than in Japan. Sharp has reportedly adopted a massive outsourcing strategy to further reduce the cost of the LED and power supplies.
• The Koreans have targeted the LED market in a similar way to the LCD display market and are actively pursuing OEM component business via Seoul Semiconductor, LG Innotek and many other small suppliers. Outsourcing will likely not be the result as vertical integration is the normal business model.
• The wild-card in the LED market is OSRAM, who appears to be pursuing a strategy of internal manufacturing (former Sylvania with facilities in Malaysia and China) and outsourcing with long-term partners with leading EMS firms.
• Foxsemicon Integrated Technology (FITI), part of the world’s largest contract manufacturer Foxconn International, has formed close partnerships with major global semiconductor equipment, LED chip manufacturers and suppliers such as Charm and Ci out of Korea. The focus of FITI’s products is to provide a quick retrofit solution for many applications.  The company is generally viewed as a competitor in LED outsourcing similar to their component supply business.
• Cree has contracted with Flextronics International, the world’s second largest contract manufacturer, in addition to extending its Durham, North Carolina LED manufacturing facility by 275 people in 2009 and plans to fill another 300 jobs by the end of 2012. Flextronics provides final assembly services in its plant nearby in Charlotte, North Carolina.
• The third largest contract manufacturer, Jabil Circuit, also is interested in the LED lighting business but only on a limited basis. It is believed that relationships with OSRAM and Avaga are in discussion.
• Sanmina-SCI has specifically targeted LED Lighting as part of its Renewable Energy market program. No assembly programs or customers have yet to be identified although Avago is being pursued.
• In March 2010, Philips Lighting announced its selection of Elcoteq for a global growth partner of its SSL business. Elcoteq has already started the production of SSL products in its factory in Dongguan, China. Production will expand to other Elcoteq locations including Mexico and Hungary still during the year 2010.

For more details on the emerging market for LEDs in General Lighting, see the recently released market research report, The Worldwide Electronics Assembly Market for LED General Lighting – 2011 Edition by New Venture Research.  This is the company’s first foray into this market although the company is widely recognized for its work in manufacturing cost analysis and quantifying the total Cost of Goods Sold (COGS) for a variety of electronics products, now including LED lighting. This report sizes the market for LED chip or ICs, chip packaging, thermal management, optics, printed circuit board (PCB) assembly including drivers and related electrical components plus final (box) assembly and test of the LED fixture for a wide variety of end applications.  For more information see www.newventureresearch.com/

New Venture Research (NVR) has followed the electronics assembly industry for over 20 years with numerous research reports focusing on all the players and product assemblies in the electronics industry. Now, NVR is pleased to offer, The Worldwide Electronics IC, PCB & Box Assembly Application Markets – 2011 Edition. This unique database provides 2010 global IC electronics and assembly data by its individual components (semiconductor ICs, passives, discretes, labor/overhead (e.g. PCB assembly value), plus box assembly value) for 46 different product applications. This database is supported with a Word file commentary discussion of the growth market trends of the leading products. This database provides the foundation for NVR’s other reports in electronics packaging and electronics product assembly by supplier (OEM, EMS, ODM). This report is the foundation by which our other packaging and assembly market reside providing a complete understanding of the cost elements for leading electronics products including IC semiconductor, PCB board and Box assembly cost elements in the leading electronics product assembly application markets. The database divides the global electronics industry into seven critical market segments including:

• Automotive
• Communications Computers /Peripherals
• Consumer Electronics
• Industrial
• Medical
• Aerospace/Military/Other Transportation

A discussion of each market application and the trends is included with the database in a Word document. Each market segment and individual product application is reviewed for semiconductor, PCB and Box costing trends.

The Worldwide Electronics IC, PCB & Box Assembly Application Markets – 2011 Edition, will provide the critical information you need on electronics COGS assembly. The Excel and Word files are shipped by email as a single-user license priced at $2,995. An extra single user license is $250 and a corporate license is $1000.  See our website at www.newventureresearch.com/ for obtaining a detailed brochure.

Whereas the overall MEC market is slowly recovering from the trauma of 2009′s economic meltdown, the performance of various market segments, bus architectures, and companies will recover at different rates.  Total revenue was just under $5 billion in 2010, a 4 percent increase from 2009 revenue which had a 12-14 percent decrease over 2008.  If the worldwide economies stablize, the MEC industry will likely recover at about 6 percent in 2011 to ~$5.2 billion.

The MEC report targets five specific application markets: Communications, Industrial, Medical, Military/Aerospace and an Other category that includes transportation, security, surveillance, point-of-sale/kiosk applications, etc. The Communication wireless segment is being driven by smart phone traffic.  3G/4G services are where the money is for carriers going forward and the wireline and optical networks are gearing up for upgrades to support the ever increasing traffic.  The Industrial market particularly suffered from the financial crisis but investment in capital equipment infrastructure as well as test & measurement is starting to return.

The Medical segment was hit hard by the healthcare cutbacks which made purchasing MEC-based, large equipment much more difficult. The usually healthy Military/Aerospace segment is facing a rapidly declining defense department budget in the USA that is likely to cause a restructuring not seen since the end of the cold war.

Each architecture has a different rate of adoption depending on the needs of individual application segments.  Overall key trends are “Power is up and down; Green is the new color; and small is big.”  New 40 and 32-nm silicon for microprocessors, graphics, DSPs and high integration I/O chips pack a lot of processing power while greatly reducing power consumption.  High integration silicon and serial buses enable more small form factors (SFF) than in the past and are making many older, parallel bus structures, such as PCI, look like the bus architecture equivalent of a “clunker.”  Bus structures continue to proliferate around the major and long established busses but the number of variances is past 100.

The MEC industry can be segmented into four form functions defined as: single-board computers (SBC), digital signal processor (DSP) boards, I/O boards and an ‘All Other’ category that incorporates a huge number of diverse and specific functions. In some applications I/O boards are proliferating and are customized to the wide spectrum of I/O functions that different applications use.  In other applications, single-board computers are becoming the trend as they incorporate more and more functionality with advanced silicon and draw in DSP, graphics and many advanced I/O functions.

The Merchant Embedded Computing Market – 2011 Edition is more than 400 pages in length and is sold as a PDF file for $2995.  See our website at www.newventureresearch.com/ for a detailed brochure.

For more information please contact:

Randall Sherman
New Venture Research Corp.
337 Clay St., Suite 101
Nevada City, CA 95959
USA
530-265-2004
rsherman@newventureresearch.com

Advancements in IC packaging have allowed the final product to become smaller, cheaper, and thus more desirable to the final customer. In the newly published report, Advanced IC Packaging Technologies and Markets by NVR, (www.newventureresearch.com), the following areas of advanced IC packaging are discussed in length, including forecasts of units, pricing, and revenue.

• Stacked IC Packaging
• Through Silicon Vias (TSVs)
• System in Package (SiP)
• Wafer Level Packages (WLPs) including Fan-out WLPs
• Staggered Inner-Row QFNs
• Interconnection, including Flip Chip

Through silicon vias, while still a ways off in terms of implementation, have promise in a number of markets, including DRAMs, MPUs, PLDs, special purpose logic communications chips, CMOS image sensors, and graphics chips. Flash is another potential market for this technology. TSVs and the market size potential are discussed in length in this report.

Other findings in this report include:

― Stacked packages will grow from 2.6 billion in 2009 to 5.5 billion in 2014

― SiPs will grow from 1.4 billion in 2009 to nearly 3 billion in 2014

― WLPs will grow from 6.8 billion in 2009 to 16.8 billion in 2014;

― Fan Out WLPs will expand from 2.9 percent of that in 2009 to 6 percent in 2014

― QFNs will grow from 10 billion in 2009 to 22 billion in 2014;

― Staggered inner-row QFNs will expand from less than 1 percent in 2009 to 6 percent in 2014

For more information see www.newventureresearch.com, or contact Karen Williams, at kwilliams@newventureresearch.com, phone (408) 244-1100, fax (408) 864-2138, or the principal analyst Sandra Winkler, at slwinkler@newventureresearch.com, phone (650) 299-9365.