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Volume refers to the number of units built, with products like consumer electronics on the high end and prototype, medical electronics or machinery on the low end. Mix refers generally to the complexity or different models of the PCB assembly. Other categories have been suggested by StepBeyond/EMSinsider and CIRCUITS ASSEMBLY: Micro Tier (<$50M) Tier 4 <10m and "Tier Mega" referring to the Big 2, Foxconn and Flex.Īnother distinction is drawn between EMS that specializes in High Mix Low Volume (HMLV) and High Volume Low Mix (HVLM). There is no hard rule on the actual revenue designation at this time. The EMS industry is commonly divided into Tiers by their revenue: A wave of consolidation followed as the more cash-flush EMS firms were able to buy up quickly both existing plants as well as smaller EMS companies. By the end of the 1990s and early 2000s, many OEMs sold their assembly plants to EMSs, aggressively vying for market share. EMS players like SCI and Avex struggled to exist, because OEMs would pull contract or change vendors constantly.īy the mid-1990s the advantages of the EMS concept became compelling and OEMs began outsourcing PCB assembly (PCBA) in large scale. The early 1990s saw OEMs rapidly installing SMT lines. The development of Surface Mount Technology (SMT) on printed circuit boards (PCB) allowed for the rapid assembly of electronics. Therefore, they can respond to sudden spikes in demand more quickly and efficiently.
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This frees up the customer who does not need to manufacture and keep huge inventories of products. The business model for the EMS industry is to specialize in large economies of scale in manufacturing, raw materials procurement and pooling together resources, industrial design expertise as well as create added value services such as warranty and repairs. These new companies offered flexibility and eased human resources issues for smaller companies doing limited runs. At the time, most electronics manufacturing for large-scale product runs was handled by the in-house assembly. The EMS industry took off after the late 1970s when Solectron was established.
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