China counts some of the largest electronic assembly factories in the world. Many factories active in electronic assembly are producing their own products. Many others provide contract manufacturing services. China is where most EMS (electronic manufacturing service) companies of CEMs (contract electronic manufacturers) have large production capabilities.
But there are very large differences between companies and the industry is very diverse. It seems interesting to describe the industry a little more.
Extended supply chain
Over the last 30 years, China has seen massive investment in the entire spectrum of the electronic industry supply chain.
It now counts a very strong fabric of assembly companies as well as their suppliers and supporting businesses:
- Electronic assembly companies assembling PBAs (printed board assemblies);
- Companies making components and PCBs (printed circuit boards);
- Companies distributing imported components in China;
- Companies producing or distributing production and test equipment.
From a geographical point of view, the industry is concentrated into 2 main hubs :
- The Yangzi River Delta, i.e. the provinces of Jiangsu and Zhejiang as well as Shanghai;
- The Pearl River Delta, i.e. the province of Guangdong and in particular the cities in the vicinity of Hong Kong (Shenzhen, Donguang, Guangzhou . . .)
There are EMS across China but these two hub see the strongest concentration of all the links in the supply chain is in those 2 hubs.
Electronic Assembly Sectors
Electronic contract manufacturers often specialize and focus on one or a few of the following segments:
- Industrial electronics and control;
- Consumer Electronics.
- Telecommunication, networking and IT;
- Medical applications;
- Consumer Electronics.
Companies involved in consumer electronics and automotive are structured for high volume production. Companies working for industrial applications are often structured for lower volume and higher mix.
Description of the players
Top Tier manufacturers:
We are talking here about the large multinational players such as Jabil, Flextronics, Foxconn and others.
They display the following characteristics:
- Multiple sites and very large companies;
- Focus on high volume (Consumer electronics, automotive . . .)
- Strong capabilities for PBA and full assembly;
- Strong management, processes and quality assurance.
Mid Tier manufacturers:
- One or two sites per company – sites of various sizes;
- Focus either on large volume with specialized lines or on high mix low volume business;
- Good SMT/PTH capabilities – some can assemble full systems;
- Wide range on management and processes: some very well managed and other poorly so.
Bottom Tier local manufacturers:
- Small companies (1 or 2 SMT lines);
- No special focus – they often are an extension of PCB or plastic injection company;
- Have limited sourcing capabilities and assembly capabilities;
- Many companies loosely managed or with old equipment.
The good companies of any tier will be fully certified and will have some of the following certificates:
- ISO 9001
- ISO 14001
- TS 16949