Near term EMS/ODM recovery ‘unlikely’

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The global contract manufacturing industry is unlikely to experience near term recovery, according to a survey by iSuppli.

The report reveals that despite encouraging signs, the EMS/ODM industry may not yet have hit the bottom. Adam Pick, iSuppli's principal analyst for EMS/ODM services, said: "iSuppli's latest research indicates that some fundamental issues - including OEM demand levels, excess capacity, margin erosion and solvency concerns - may inhibit a quick turnaround for most EMS/ODM players." Pick revealed that revenue for the top EMS providers declined by 16% in Q1 2009, compared to the same period in 2008. However, this is an improvement from the 18% decline in Q4 2008. Pick will be hosting a webinar entitled Have EMS and ODMs Hit the Bottom? On June 10. To register for this event, click here. iSuppli Figure: Top 10 EMS Quarterly Year-Over-Year Sales Growth (Percentage Growth) Q1 2007: 24% Q2 2007: 18% Q3 2007: 16% Q4 2007: 20% Q1 2008: 6% Q2 2008: 2% Q3 2008: 2% Q4 2008: -18% Q1 2009: -16%