PRINTED CIRCUIT DESIGN & FAB / CIRCUITS ASSEMBLY APRIL 2012 50

EMS TOP 50
+DUG/(66216/($51('
A March earthquake. September floods. Social unrest.
Throughout 2011, upheaval was in the air. by MIKE BUETOW
Acquisitions, bankruptcies and Mother Nature were the
name of the game in 2011, as topsy-turvy market condi-
tions coupled with inexplicable environmental disasters and
unprecedented social backlash led to what were in some cases
previously inconceivable opportunities.
In what will remain a year for the books, an earthquake and
subsequent tsunami hit northeastern Japan, wiping out scores
of manufacturing plants and other business, and leaving painful
images of the dead. But in what turned out to be Japans finest
hour, the nation recovered quickly, with most multinational
business back to normal within two quarters. Thailand wasnt
so fortunate. Plants there took such a drubbing that it could be
a year before they are usable again. Worse, the repeat disasters
had decision-makers rethinking their supply-chain plans.
Had it not been for the weather, the story of the year would
have been Elcoteq. Once a top 5 EMS company, the onetime
main supplier to Nokia found the competition from Foxconn
too much to overcome. It saw sales and profits spiral down
over a five-year span, then finally declared bankruptcy last fall,
shuttering or selling all but four of its 13 manufacturing sites.
Watching, and perhaps
learning from, Elcoteqs
mistakes, No. 2 Flextronics
bailed from the price-sensi-
tive PC assembly space in
2011. Having just formally
entered the PC production
business in 2008, Flextron-
ics quickly grew that seg-
ment to $4 billion in annual
revenue, only to see margin
erosion threaten to wipe
out the companys profits.
Competing in a commodity
space works only for the
largest player, it seems.
Speaking of the larg-
est player, Foxconn (who
else?) in 2011 continued
its long reign at the top of
the pile. It seems hard to imagine, but 10 years ago, Foxconn
trailed Flextronics, Solectron, Sanmina-SCI and Celestica in
annual revenues. Still, cracks in its formidable armor began to
show. Dinged by government-mandated wage hikes, Foxconn
has moved much of its reportedly 800,000-man workforce
inland, leaving its Shenzhen campus to Apple (more on that
in a moment). Worldwide social pressures shone an uncom-
fortable spotlight on Foxconn, where a blitzkrieg of worker
suicides, plant explosions, inflammatory statements (and, per-
haps, just a little bit of Apple fatigue) put the firm squarely in
the crosshairs of the mainstream media, not to mention several
workers rights NGOs. In response, Foxconn intimated plans
to automate a number of its operations with robots.
Upheaval. An army of robots would have made no difference
in Thailand, which was turned upside down when fall floods
like none seen in the country in 50 years soaked the nation
for the better part of two months. No EMS company was
decimated more than Fabrinet, No. 19 on the 2010 list and
headed for an even higher ranking. High waters breached two
of its facilities, rendering one permanently closed and taking
the other offline for months. Others that felt the impact in
Thailand included No. 6 Cal-Comp, No. 7 Benchmark, No. 42
Hana Microelectronics and No. 47 SVI Public Co.
No. 14 Beyonics also was hit hard by the Thailand
floods. Having seen sales fall about 15% over the past two
years, and in the midst of five straight unprofitable quarters,
the Singapore-based firm in October announced plans to go
private. (The company should know something about going
private; its founders came from Flextronics, which did the
same thing in 1987 before relisting in 1991.)
In the aftermath of Japan and Thailand, certain OEMs and
EMS companies are rethinking their supply chains. No. 3 Jabil
already has made clear it wants to navigate away from the all-in-
one industrial parks where suppliers sit almost on top of each
other so characteristic of the Pacific Rim. Moreover, as com-
panies become more aware of time-to-market and the amounts
of capital tied up in product in transit from distant lands, a trend
is emerging toward positioning production closer to the point of
end-use, a phenomenon known in the US as reshoring. Social
1 USD
= 0.762613 euros
= 0.63738 British pound
= 6.56100 Chinese RMB
= 7.75637 Hong Kong dollars
= 222.241 Hungarian forint
= 82.4575 Japanese yen
= 3.01050 Malaysian ringgits
= 5.59383 Norwegian kroners
= 1.25386 Singaporean dollars
= 6.79566 Swedish kronors
= 29.51 Taiwanese dollars
= 30.557 Thai baht
TABLE 1. Currency Conversions
51 APRIL 2012 PRINTED CIRCUIT DESIGN & FAB / CIRCUITS ASSEMBLY
pressures, accented by the long and loud protests over alleged
worker exploitation that have landed Foxconn (and its leading
customer, Apple) on the front page of The Wall Street Journal
for all the wrong reasons, are also leading assemblers to contem-
plate not just higher but politically safer ground.
As usual, major mergers and acquisitions changed the
face of the Top 50 list. No. 21 OnCore Manufacturing, a
major defense and aerospace supplier, acquired Victron in
what was essentially a merger of financial equals. No. 31
Ducommun made the biggest splash in its 157-year history,
acquiring LaBarge in June to form a defense electronics pow-
erhouse. No. 16 AsteelFlash bought Catalyst EMS. (Just after
the year ended, No. 8 Plexus announced a deal to acquire
Kontron Design Manufacturing Services in Penang.)
Falling off the list was EPIQ, which sold a total of five plants
in Bulgaria, Czech Republic and Mexico to No. 25 Integrated
Microelectronics Inc. Also departing was Surface Mount Tech-
nology Holdings (No. 45 in 2010), the Hong Kong-based EMS
firm that endured a painful reorganization in 2011. Revenue
plunged 38% year-over-year to about $177.6 million. Suffering
a similar fate is former Top 50 mainstay Simclar, which has seen
sales fall from a high of $400 million in 2006.
Joining the list were several large flex circuit companies
whose EMS revenues were previously not properly accounted
for. Most flex PCB fabricators also perform assembly, and it is
difficult to get an accurate reading of the value of the bare board
from the finished assembly. However, based on data from IPC
and others, bare flex circuits comprise roughly 40% of the ship-
ment value. Based on such estimates, No. 12 Nippon Mektron
(which has at least 11 plants that perform SMT assembly) and
No. 28 MFLEX are now represented in the Top 50.
Whither Kaifa? Not making the list: Sichuan Changhong Elec-
tric, a huge Chinese entity (35,000 employees) that makes TVs,
white goods and other components. While it builds product
for several brand name Japanese OEMs, it was impossible to
determine just what its EMS/ODM sales were in 2011. Same
goes for Aeroflex. We also left off ODMs such as Qisda, Com-
pal, Wistron, BenQ, and others that are essentially OEMs.
Should Shenzhen Kaifa Technology be included in EMS
rankings? Its not an easy question to answer. On revenue
alone, perhaps: Kaifa, as the company is known, had sales of
over $4 billion last year. Using that gross number would place
it squarely between Sanmina-SCI and Cal-Comp in the Top 10.
But theres more to it than that. Kaifa generates an
extraordinary amount of its revenue from making and selling
hard disk drives to Seagate. In fact, under most classifica-
tions, Kaifa would rank as an ODM, and not just of printed
circuit board assemblies.
Then theres the confusion of what, exactly, Kaifa is. The
company, which is supposedly traded under the ticker symbol
00021 on the Shenzhen Exchange, has no current listing. How-
ever, it is also apparently a subsidiary of China Electronics Corp.
CEC is giant. The conglomerate says its annual revenues
topped $8 billion back in 2006, and it employs more than
70,000 workers across some 61 subsidiaries, including 13
listed holding companies. Among them are cellphone and
datacom OEM Panda Electronics, computer and TV manu-
facturer Greatwall Technology, and yes, Kaifa.
It also is state-owned, and operates directly under the
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PRINTED CIRCUIT DESIGN & FAB / CIRCUITS ASSEMBLY APRIL 2012 52
EMS TOP 50
RANK COMPANY NATIONALITY 2011 REVENUES (US$M) URL NOTES
1 Foxconn Electronics
1,2
Taiwan $93,100 foxconn.com NGO backlash takes shine off iPad maker
2 Flextronics
1,3
US $27,450 flextronics.com Exits ODM PC biz, reducing consumer exposure
3 Jabil Circuit
1
US $16,760 jabil.com Biting off more of Apple
4 Celestica
1
Canada $7,210 celestica.com Quietly demonstrating technical and financial excellence
5 Sanmina-SCI
1,4
US $6,040 sanmina-sci.com Two straight growth years
6 Cal-Comp Electronics/Kinpo Electronics
1,5
Thailand $4,469 calcomp.co.th Elbowing into N. America
7 Benchmark Electronics
1
US $2,300 bench.com Thailand floods proved finest hour
8 Plexus
1
US $2,195 plexus.com Coke eases networking volatility
9 SIIX
1
Japan $2,035 siix.co.jp Partnering in US; expanding in Indonesia
10 Universal Scientific Industrial Co. (USI)
1
Taiwan $1,953 usi.com.tw Now owned by ASE
11 Venture Corp.
1,5
Singapore $1,940 venture.com.sg Took a 9% sales hit in 2011
12 Nippon Mektron
1
Japan $1,390 mektron.co.jp 11 flex circuit plants worldwide
13 Zollner Elektronik Germany 1,255
E
zollner.de Expanding in style in US
14 Beyonics Technology
1,5
Singapore $929.1 beyonics.com Being taken private
15 UMC Electronics Japan $840
E
umc.co.jp Will be Japan's third billion dollar EMS
16 AsteelFlash Group France $780 asteelflash.com Acquisitions, not market, will drive 2012 growth
17 Global Brands Manufacture
1
Taiwan $690.8 gbm.com.tw Also a top 10 bare board fabricator
18 Fabrinet
1
US $668.1 fabrinet.com Bangkok flooding washed out profit streak
19 Kimball Electronics Group
1
US $653.9 kimball.com Feeling pinch from medical, industrial drops
20 Sumitronics Japan $650
E
sumitronics.co.jp Sumitomo subsidiary
21 On Core Manufacturing US $640
E
oncorems.com Victron deal doubled its size
22 Nam Tai Electronics
1
China $602.3 namtai.com Gov't delaying China expansion
23 Elcoteq
1,6
Luxembourg $600
E
elcoteq.com Total collapse
24 Creation Technologies Canada $547 creationtech.com Has never closed a facility
25 Integrated Microelectronics Inc. (IMI)
1,7
Philippines $501.5 imiphil.com Acquisitions boosting growth
26 3CEMS Group (FIC Group) China $500 3cems.com Lite-On's biggest supplier
27 Enics Switzerland $499.4 enics.com Expanding in Suzhou
28 MFLEX US $497.8 mflex.com Apple in their eye
29 Eolane France $476 eolane.com Picked up Elcoteq Tallin
30 Di-Nikko Engineering
1
Japan $466.6 dne.co.jp Expanding in Japan
31 Ducommun LaBarge
1
US $452.3
E
labarge.com Estimates $80M from LaBarge in Q2
32 Videoton Holding
1
Hungary $450 videoton.hu Pride of Eastern Europe is big in automotive
33 VTech Communications
1
Hong Kong $419.6 vtechems.com EMS division supplanting phone biz
34 Wong's Electronics/WKK Technology
1
Hong Kong $380 wongswec.com Solid year in China
35 Neways Electronics
1
the Netherlands $372.2 neways.nl Upgrading SMT lines and test capabilities
36 Topscom Precision Industry Hong Kong $350
E
topscom.com.cn Networking EMS; hard to pin down numbers
37 V.S. Industry
1
Malaysia $353.2 vs-i.com Under the radar, but customers everywhere
38 Alco Electronics
1,5
Hong Kong $342.5 alco.com.hk Heavily vested in Blu-ray
39 Selcom Italy $316.4
E
selcomgroup.com Will Italy's dive bring it down too?
40 PartnerTech
1
Sweden $328.5 partnertech.se Q4 rescued year
41 Computime Ltd.
1,5
Hong Kong $321.1 computime.com White goods maker
42 Hana Microelectronics
1
Thailand $320.1 hanagroup.com EMS now 60% of sales; also IC assembly/test
43 CTS Electronics Manufacturing Solutions
1
US $308.7 ctscorp.com Fires in Scotland, floods in Thailand
44 Kitron
1
Norway $296.1 kitron.com Slow Q3 couldn't derail Kitron
45 Key Tronic EMS US $283.7 keytronic.com 31 straight quarters of profitability
46 SRI Radio Systems Germany $283 sri.de Former Siemens unit spun off in 1997
47 SVI Public Co. Thailand $278.3 svi.co.th Floods marred rebound
48 Scanfil
1
Finland $276.3 scanfil.fi Went public Jan. 1, 2012
49 MC Assembly US $258
E
mcati.com Forecast 20-25% growth in 2012
50 Fittec International
1
Hong Kong $233.9 fittec.com.hk Loss of Toshiba biz brutal
Notes:
E = Estimate.
1. Publicly held.
2. Includes ODM work; excludes $1.3 billion in PWB sales
3. Includes ODM work; excludes $2 billion in PWB/component sales
4. Excludes $400M in PWB sales
5. Based on four quarters ended Sept. 31
6. H1 $487.2M, rest estimated
7. Excludes $74M from PSI Technologies
TABLE 2. The CIRCUITS ASSEMBLY Top 50 EMS Companies, 2011
53 APRIL 2012 PRINTED CIRCUIT DESIGN & FAB / CIRCUITS ASSEMBLY
administration of Chinas central government. Forget, for the
moment, how strange it is for what is essentially a government
entity to be publicly traded. Consider instead whether a gov-
ernment business can be considered a contract manufacturer,
especially in China, where the Communist Party still holds
sway over most economic policy and can pick the winners and
losers at the drop of a hat. Want to get a government contract?
Use a government provider. It becomes hard to distinguish
between what is competitive bidding and what is political.
Then theres the matter of CECs financials. They are
dense, to be sure. Its hard to tell what revenue comes from
external customers and what is just padding from its own
pyramid. Among those that can be discerned, Greatwall
alone made up $1.6 billion in revenue in 2010. Read the fine
print and youll see the company has several deals in place
to buy components and services from other CEC subsidiaries.
So should Kaifa be listed on the CIRCUITS ASSEMBLY Top 50?
Because it is next to impossible to know what its true revenue
from EMS-related activities is, we say no, while respecting
the decision of others to disagree.
EMS is a lopsided business. The CIRCUITS ASSEMBLY Top 50
make up about 87% of the total revenues of the entire elec-
tronics outsourcing industry, although that figure admittedly
includes a fair percentage of revenue that would properly be
classified as ODM work. The industry as a whole reached about
$205 billion in sales last year, according to IHS iSuppli. (The
research firm predicts industry revenue to be flat in 2012.)
The US continues to dominate the Top 10 list, with five of
the top eight entries, although we are seeing some minor shifts
take place (TABLE 3). Regionally, the Top 50 remain intact, led by
Southeast Asia (16 entries), North America (15) and Europe (12).
Japan gained two entries,
a reflection of heretofore
unacknowledged EMS
work. Notable for its
lack of entries is Russia,
which almost certainly has
domestic firms that would
qualify, and whose elec-
tronics assembly industry
was forecast to reach $14
billion in 2010 (55% of
which was industrial or
military). While changes
in the rankings have been
most common in the mid-
dle to lower half of the list,
a few firms are threatening
to shake up the top. Given
their organic growth
and acquisition strategy,
respectively, Zollner and
AsteelFlash look like good
bets to break into the Top
10, should any of the cur-
rent leaders falter. CA
MIKE BUETOW is editor in
chief of CIRCUITS ASSEMBLY.
US 13
Hong Kong 6
Japan 5
Thailand 3
Taiwan 3
Canada 2
China 2
Singapore 2
France 2
Germany 2
Finland 1
Hungary 1
Italy 1
Luxembourg 1
Malaysia 1
Netherlands 1
Norway 1
Philippines 1
Sweden 1
Switzerland 1
TABLE 3. Top 50 Entries by Nation