The times of fake news about the European EMS market is over. E³MS, the project of the analysis of the European electronics engineering (E³) & manufacturing services industry is finished. Three years of research, lots of night shifts at the computer, incredible amounts of chargeable downloads from European company registers (not all registers are free of charge), many translations of annual reports of European EMS in several different languages (there are 24 different languages in countries with EMS companies), crosschecks of more than 1700 internet pages of EMS companies, all resulted in the in4ma database about the European EMS Industry.
Today, there are 1705 different EMS legal entities in Europe, belonging to about 1400 different companies. They achieved revenues of EUR 35.075 billion in 2016. Yes, you read correct, 2016. Anyone who told you numbers about 2017 in the beginning of 2018, told you fake news. Even now, in the middle of the third quarter of 2018 it is not possible to give you correct numbers for 2017, not even close.
The three biggest European EMS, Foxconn, Flex and Jabil have not reported all of their results in the country company registers so far. If you read European EMS numbers for 2017 in early 2018, they were lies, because no one was able to have those numbers that early. However, some press just publish any fakes without crosschecking.
In the past we were told, that the European EMS industry was EUR 28.1 billion in size with about 1,000 EMS manufacturers of which Western Europe accounted for EUR 10.4 billion. We learned as well, that 2014 was a tough year for most EMS companies with revenues in Western Europe declining by almost 3% while an increase of 3.4% in Central and Eastern Europe (CEE) and Middle East/North Africa (MENA) helped the overall European market post growth of 0.5%. In Western Europe EMS, revenues were forecasted to reach EUR 11.7 billion in 2020, up from EUR 10.8 billion in 2015.
First, let me correct the issuers of such fake news and the publishers printing it. Neither the Middle East nor North Africa are part of Europe, which means, they cannot help the overall European market, as they are not part of Europe. Europe ends at the Bosporus and not even the Anatolian part of Turkey is part of Europe.
Second, a Danish market researcher already established a database of 1,300 EMS manufacturers in 2007, there were insolvencies and new companies entering the market, but it never dropped to 1,000 companies in the last ten years. Based on this old database, all companies were crosschecked and all new findings added, leading to 1,705 as of September 2018.
Third, let us do a very complicated mathematical operation, which seemingly not everybody can do: In 2015 the EMS industry in Germany, Austria and Switzerland had combined revenues of EUR 7.7 billion, UK and France had EUR 2.3 billion each, Scandinavia had EUR 2.0 billion, Italy EUR 1.4 billion and the Benelux states (for American specialists: this is Belgium, The Netherlands and Luxemburg) had EUR 1.0 billion. Including Ireland, the Iberian Peninsula, Greece and Malta (Yes, there is an EMS in Malta!) as well, Western Europe had revenues of 17.5 billion Euro, whereas Eastern Europe had revenues of 16.46 billion Euro in 2016. We had a growth rate of 5,7% in Europe, no decline at all.
Only the French Press were farsighted enough, when they asked the question: “Marché de la sous-traitance en Europe de l’Ouest: pas plus de 11 milliards d’euros cette année?”Source: ViPress.net.
Forth, the predictions for 2020 and 2022 for Western Europe and all of Europe were exceeded already before 2013. With some minor exceptions, the EMS in the German speaking countries rely their benchmarking and strategic decisions on the in4ma EMS market statistics as they know exactly, how the statistics were prepared.
How did the EMS industry in Europe perform in 2017? This question can only be answered, when the numbers of Foxconn in the Czech Republic (Hungary and Slovakia already published) and of Jabil and Flex in Poland are being published in the country company registers. If one just takes the numbers for 2016 for 2017 as well, one gets to a growth rate of 3.7%. However, this is foolish, as these three big EMS had tremendous jumps in their revenues in the past, to the upside as well as to the downside. Considering this, the 3.7% could easily be 2.6% or 4.9%.
The in4ma database not only contains revenues and employee numbers but as well detailed contact data for each of the 1.705 active EMS companies. In addition, for many companies, the founding years, NACE codes, export ratio, revenues with own products, net profit and many other balance sheet data are saved. Even the companies, which left the market within the last four years, are available. Weiss even discloses all of his sources and is willing to show anybody the insights of his database, as long as numbers given under NDA agreements are not visible.
If you read about the European EMS industry in future, let the issuer exactly explain to you how he got to the numbers, do not accept every garbage. The in4ma numbers are based on the difficult operation of “addition of revenues of 1705 EMS companies in Europe”. If you have a better way of getting to accurate numbers, write me or meet me at electronica in Munich this year.
This is a guest post by Dieter G. Weiss of www.in4ma.de.