The Researches On The Challenges And Solutions To The EMS Industry Growth In China

Outsourcing has been the major trend in global manufacturing industry. EMS (Electronics Manufacturer Service),typically a capital and technology intensive industry, as the application of outsourcing in electronics manufacturing industry has experienced high speed growth since 1990s. EMS industry has been the major force to make China becoming the Manufacturing Center for Electronics Products globally. The growth of EMS in China not only uplifts the capability and technology of China's electronics manufacturing, but also provides a great chance for China companies participating in global economics division and cooperation and finally helps domestic companies to achieve the strategy of globalization and the goal of"step to the world".But EMS industry in China is facing great challenge and threats coming from both external and internal factors. The external challenges includes: firstly, EMS industry is in the harsh price competition and EMS company is facing the great pressure from decreasing profit margin; secondly, EMS supplier is pushed hard for quicker response to market and customer demand as well as the challenge from shorter product life cycle; thirdly, the paradox of pursuing high flexibility and surplus of production capacity; The internal challenges comes from: first, China EMS industry is dominated by foreign invested company and local EMS company size is relatively small; secondly, China is loosing the advantage of competitive labor cost and facing more competitions from other low cost countries and regions.Because of the importance of EMS industry to China's economics and manufacturing development, by reviewing the theoretical and practical needs of EMS industry development, basing on the analysis of EMS industry current situation and its prospects as well as the threats & challenges China EMS industry is facing, this article gives the proposal to China EMS companies how to build up the core competence and competition advantage through the way of adopting differential strategy to build up creative business &operation management models, furthermore, this article also proposes that government should use the macro-economic measures and provide the appropriate policy guideline to facilitate EMS deepening development in China and to better enhance China's competition position in the new wave of global industry transition.