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15-Oct-04 Singapore, October 15th, 2004 – Fusion Consulting releases findings from an in-house industry briefing study, which predicts that the output of Southeast Asia’s electronics industry will reach US$96 billion by 2010. This represents a year on year growth of 7.6% from an estimated output of US$62 billion by the end of 2004. The Fusion Consulting study benchmarked key Southeast Asian electronics manufacturing countries against each other in terms of national investment, production and exports, and analysed growth potential. The business intelligence consultants predict that: • Singapore is expected to lead the industry with a projected output of US$17billion by 2010. This growth will primarily be driven by the semiconductor sector as the number of applications in computing, consumer audio/visual, domestic appliances, digital cameras, automotive and medical equipment for example, continues to increase. • Thailand’s electronics industry comes second after Singapore with an output estimated at US$14 billion by 2010, as it is led by a stable economy and growing domestic consumption that will ensure growth in electronics production. Further growth may however be held back by requirements in import components. • Malaysia’s electronics output is projected to grow to US$9 billion by 2010. Production is expected to remain strong, but Malaysian electronics manufacturers will struggle to compete in export markets against China due to higher labour costs. • Indonesian electronics output is expected to be worth about US$7 billion by 2010. Indonesia’s strength is in lower added value assembly and its exports will be hit by slowing growth in Japan and China, which are important export markets for basic components. • The Philippines’ electronics output is expected to reach US$6 billion by 2010. While the Philippines has some of the best educated technical resources, political and economic uncertainties mar the future. • Vietnam should triple its electronics output to US$3 billion by 2010. Growing at the fastest rate, Vietnam’s electronic industry is still small and dominated by foreign joint ventures. “Concern among Southeast Asia-based electronics manufacturers over competition from China is relevant but should not be overplayed. There is still room for growth in Southeast Asia, as long as companies continue to build reputations in product design and reliability. Product design will increase in importance as makeovers of existing products gradually outweigh new product introductions. Reliability will increasingly be a key issue for production, as miniaturization drives up default rates and production costs. These are not traditional strengths of Chinese manufacturers. Added to that, most major players, especially in the manufacturing services area, very sensibly operate a dual hub strategy with production facilities in both China and Southeast Asia.” said Mr. David Yew, head of the Information and Communications Technology practice at Fusion Consulting in Singapore. About Fusion Consulting For more information, please contact Fusion Consulting at
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