Will India Become a Global EMS Provider?

摘要

The well-known economic advantages of China are reversing, causing problematic situations for its factories. Labor costs are increasing steadily, and the Chinese workforce is demanding higher standards of working conditions. This situation has not only reduced profits, but created a shortage of workers willing to work in China's industrial cities. China's labor rates have been increasing from the low side of $0.50 to as much as $3 per hour. This is a result of the movement that can be labeled as the "Silent Chinese Labor Revolution." Compounding this trend is the gradual increase in the value of China's currency (yuan). Result: OEMs are seeking alternative low-cost assembly solutions, specifically for high-volume/low-mix product. Those OEMs seeking to maintain total acquisition costs (TAC) have looked toward Vietnam, the Philippines, Burma, South Africa and Eastern Europe. Yet India, which remains quiet in its own promotion, may be the next preferred region for low-cost global EMS supply. Here we review factors involved in China's labor dilemma, its attempt to remedy the problem and India's opportunity to take a quantum leap into the global EMS marketplace.