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88 SMT Magazine • December 2015 by Frederick blancas inTEGRATED MiCRo-ElECTRoniCS inC. The EMS industry faces myriad difficulties. Looking at the latest figures of New Venture Research, a market research firm covering elec- tronics manufacturing, the global EMS industry is anticipated to grow a mere 6.4% compound- ed annual growth rate (CAGR) from US$336 billion in 2014 to US$458 billion in 2019. Gone are the times when the industry used to post double-digit growth rates. The total electronics assembly market, on the other hand, is expected to grow at 6% CAGR from US$1.26 billion in 2014 to US$1.68 billion in 2019. The EMS industry has a slightly better growth rate projection. The total electronics assembly outsourced by the OEMs in 2014 to EMS providers and origi- nal design manufacturers (ODMs) accounted for 34.4% of the value of the total electronics as- sembly. This small piece of the pie for the elec- tronics outsourcing segments will likely grow minimally to 34.9% in 2019. The OEMs still comprise the bulk of electronics manufacturing. In a very dynamic business environment, the fate of the industry is marked by the yin and yang forces of challenges and opportunities. Sluggish economy The global economy is not yet out of the woods. The October 2015 IMF World Econom- ic Outlook report states, "Prospects across the main countries and regions remain uneven. Relative to last year, the recovery in advanced economies is expected to pick up slightly, while activity in emerging market and developing economies is projected to slow for the fifth year in a row, primarily reflecting weaker prospects for some large emerging market economies and oil-exporting countries." The recovery is expected to continue in the U.S. and Euro zone but the growth outlook is very modest. The U.S. economy is expected to grow by 2.6% year-on-year this year and 2.8% next year versus last year's 2.4%. The Euro zone economy is likely to grow slightly by 1.5% this year and 1.6% in 2016 from last year's 0.9%. Japan is likely posting 0.6% growth rate in 2015 due mainly to weak exports to China and the U.S., coupled with poor consumer spending. The growth in China will likely slowdown to 6.8% this year and 6.3% next year—faster compared to other economies' growth rates but not as fast as its 7.3% last year. China's weak- ness is due to a large extent to overcapacity in EMS ProvidErS: Maintaining Competitiveness and Seeking Significance ArTiCle

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