New research from Frost & Sullivan in the North American Aerospace and Defense EMS provider markets shows the market posted $3.83 billion in revenue in 2005, and is expected to hit $6.72 billion in 2012.
In an effort to achieve operational excellence, increase revenue, boost profit and retain market share, aerospace and defense (A&D) and original equipment manufacturers (OEMs) are looking to electronics manufacturing services, the analysis says.
“The A&D landscape is constantly evolving and as budget constraints rise, OEMs will aim to increase competitiveness by forging strategic alliances with EMS providers,” says Frost & Sullivan Research analyst Lavanya Ram Mohan. “EMS providers deliver competitive advantage to OEMs by letting them exploit EMS expertise in offering unrivaled manufacturing capabilities, design and test services, engineering capabilities, supply chain operations and aftermarket services.”
The volume of EMS providers means competition, which means that OEMs will have high purchasing power and the ability to choose the best-fit EMS provider. The EMS providers will benefit if they are successful in forming long-term partnerships with OEMs, the research notes.
The A&D industry is focusing more attention on real time communication. That, coupled with the need for technology innovation and R&D, allows for 15 percent of the total budget for R&D to be available for EMS providers to have a share in, the study adds.
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