SAN JOSE, CA--The North American market for electronics manufacturing services (EMS) grew 47 percent in 2000, from $30 billion in 1999 to $44 billion in 2000.

According to a report by Frost & Sullivan, the EMS market will remain strong through 2007. "The North American EMS industry is consolidating quickly through mergers and acquisitions, spurring extraordinary growth rates for many multinational companies," says Frost & Sullivan industry analyst Raman Monga. Top-tier companies are acquiring smaller companies and OEM assets to boost capacity and gain supply chain effectiveness.

At the same time, OEMs are increasingly outsourcing to EMS providers to streamline manufacturing, eliminate manufacturing plants, reduce capital costs and rapidly meet demand.

Expanding operations also brings challenges, Monga says. Globalization will force large companies to efficiently manage their information networks. "With EMS providers taking on more accounts from international customers, they must find ways to communicate efficiently with their customers, relay new technology developments and provide constant updates concerning order fulfillment," he says.

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