Asia advances

Ten years ago, North America, Europe and Japan represented two-thirds of global electronic equipment production, says DECISION in a new report.

In 2012, they represented only slightly more than 40% of world production.

This share has constantly declined ever since as their specialisation in lower-volume professional production segments has not compensated for the migration of mass-market device production towards Asia.

Global electronics production was valued at more than Euros 1,410 in 2012, should grow at 3.2% per year until 2017 to reach 1,655 billion euros.

China benefited most from the production transfer and its share of world production more than doubled in the last decade to reach 38% in 2012.

China’s development is now evolving to focus more than ever on internal demand, diversification to professional electronic segments and international investment.

Due to rising labour costs, China is seriously challenged by other economies in Asia like India, Vietnam and Malaysia.

While China should remain the largest electronic equipment manufacturing country in value, its production share is expected to decrease over the 2012 – 2017 time frame to 36%.

Less impacted by the financial crisis compared to developed countries, emerging countries are still targets for foreign direct investment due to good market prospects and their relatively cheap production factor costs.

In 2012, this ‘other economies’ group accounted for 16% of the world electronic equipment production.

By 2017, this region is expected to experience the highest regional average annual growth rate with 7.9% and to consolidate its rank of second largest electronic manufacturing area with 20% of the world electronic production share.

The growth comes from the trend to delocalise electronic plants from China to adjacent countries to lower production costs especially for low-end mass-market products (like basic mobile phones, etc.) in a first step.

Aldo the growth P is due to the fact that this group of countries includes India, a country that will soon rival China as the world’s leading economy.
Electronics production in the Rest of the World (South America, Africa, etc.) is forecast to be also very dynamic with an average growth rate of 7.2 % through 2017 driven by a strong demand in telecommunication equipment, industrial electronics, aerospace and defence electronics.

In Europe and North America, however, the production of electronic equipment dedicated to automotive, aeronautics, industry and medical should compensate for the difficulties in the ICT (information and communications technologies) segment, enabling growth rates of respectively 1.7% for Europe and 1.9% for North America over the period 2012 – 2017.

This will be in spite of public budgetary constraints hampering some market segments like defence or medical equipment, as Europe and North America manage to strengthen their lead by benefitting from the high demand worldwide for these professional products with rapidly increasing electronic content.

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