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December 2015 • SMT Magazine 91 trial, and medical electronics. Analyzing the revenue breakdown per mar- ket segment for 38 of the top 50 EMS provid- ers in the world, the nontraditional segments (automotive, industrial, medical, military, and avionics) increased from to 45% in 2014 from 34% in 2013. Integrated Micro-Electronics Inc. (IMI), for example, has grown its business in the automo- tive, industrial, and medical electronics sectors, diversifying from the highly uncertain niche of storage devices and competitive space of consumer electronics. It is among the top EMS players in the automotive space. "There's a conscious collective effort within IMI to grow our automotive business. Global teams with the right automotive quality mind- set support each other to make it happen," IMI president and CEO Arthur Tan said. "We've beefed up our technical expertise and developed our own technology platforms like our automo- tive camera platforms. Also, we maintain strong partnerships with the leading Tier 1 suppliers." EMS providers have also diversified the ac- tivities that they engage in, attempting to move away from the low single-digit profit margins usually generated by PCBA and box build. Component manufacturing is one area many EMS venture into. Eric Miscoll of Charlie Barnhart & Associates LLC said that fabrication (metal and plastics) and harness manufactur- ing (copper and fiber optic) services account for roughly 10% of EMS revenues globally. Foxconn, the top EMS provider in the world, leads the industry in venturing into component manufacturing. It is successful in leveraging its expertise for mechanical and electrical parts to provide the lowest total cost solutions, result- ing in affordable electronic products for people all over the world. Sanmina designs and manufactures plastics for a variety of applications that include medi- cal and industrial products. It is also engaged in the manufacture, mechanical and thermal de- sign of indoor and outdoor enclosures for com- munications networks, medical, and industrial products. Further, Sanmina provides design and fab- rication of advanced optical and RF microwave modules as well as precision machined com- ponents and assemblies. Its Viking Technology makes solid state disk and DRAM products for a variety of high-performance computing, stor- age and industrial applications. There are EMS providers who have ven- tured into their own products. A good example is Sparton Corp. It is an industry leader in so- nobuoy—a tactical sonar system for transmit- ting submarine activity used for anti-submarine warfare. Sparton's product strategy, along with the quality of its management, helped save company. The sky is the limit when it comes to how EMS providers have diversified. We have seen diversification into higher-margin electronics markets, into adjacent markets, into new ter- ritories, and into original product manufactur- ing. It will not be surprising if they will also di- versify into non-electronics manufacturing. Seeking responsibility and Significance EMS providers have gone into green manu- facturing. For instance, they have implement- ed RoHS compliance, lead-free program in re- sponse to concerns about the environmental impact of lead and other hazardous substances in the manufacture of electronic products. Building a lead-free product goes beyond taking out lead in the materials used. It means that an EMS provider is able to re-profile an en- tire manufacturing process to ensure that it still meets the reliability requirements of building an electronic product, but at the same time tak- ing out the hazardous elements. emS ProVIDerS: mAInTAInInG comPeTITIVeneSS AnD SeeKInG SIGnIFIcAnce ArTiCle

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