VDC EXPECTS OEMS TO CONTINUE TO OUTSOURCE MORE OF THEIR MANUFACTURING TO EMS PROVIDERS THROUGH 2006, ALBEIT AT A SLOWER RATE

Contract manufacturing services will increase over the next five years, but not at the rapid pace seen in the previous five year period.

Natick, Massachusetts -- In the recently completed report titled "Survey and Analysis of Relay Consumption by Contract Manufacturers," volume IX of VDC's 2001/2002 Global Relay Market Intelligence Service, Venture Development Corporation (VDC) finds that the use of contract manufacturing services will increase over the next five years, but not at the rapid pace seen in the previous five year period. A consolidation of EMS providers will ensue, coinciding with a narrowing of their preferred vendors. What this means to relay vendors is that the pie will be bigger, but there will be fewer pieces. The top five EMS providers could increase their market share to almost three quarters of the industry's revenue, thanks to mergers and acquisitions of smaller, struggling contract manufacturers.

North American EMS providers will continue to be the center of the contract manufacturing universe, but will lose ground to European and Asia-based competitors. The fastest growth rates will occur in Europe, as OEMs in the region begin to recognize the advantages of outsourcing. While North American EMS providers will receive a good amount of this business, there is a definite opportunity for a large European contract manufacturer to appear and prosper. Asia-Pacific's growth will come mostly from OEM plants and small regional contract manufacturers being bought up by global companies. As Japanese companies and China become more open to the idea of outsourcing to global companies, contract manufacturing in the region should expand.

As expected, those applications that use relays, and that will see increased consumption by EMS providers, are computers/peripherals, consumer electronics and industrial automation and process control applications. Although smaller component consuming segments, VDC suggests continual monitoring of a number of other market areas that may see significant increased presence in the EMS arena, such as military and commercial aerospace, and medical application segments.

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To view the entire press release including charts go to:
http://www.vdc-corp.com/components/press/02/pr02-15.html

Report Availability:
http://www.vdc-corp.com/components/annual/02/br02-21.html

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ABOUT THE STUDY

VDC's "Global Relay Market Intelligence Service" is a nine-volume report covering all aspects of the relay market. These volumes are packed with exhibits, deep market segmentation, and extensive discussion on the most important issues affecting the industry. Other volumes in the Global Relay Market Intelligence Service explore additional elements of the global relay market in great detail.

The Global Relay Market Intelligence Service includes the following volumes:

Volume I - North American Market Data Report
Volume II - European Market Data Report
Volume III - Asia-Pacific Market Data Report
Volume IV - Global Market Overview
Volume V - Analysis of Buyers and Sellers
Volume VI - Analysis of U.S. Relay Consumption by State
Volume VII - E-Commerce: Opportunities, Pitfalls and Trends for Relay Manufacturers
Volume VIII - Survey and Analysis of U.S. Relay Distributors
Volume IX - Survey and Analysis of Relay Consumption by Contract Manufacturers

ABOUT VENTURE DEVELOPMENT CORPORATION

VDC is a technology market research and strategy firm. We have over 30 years of experience in providing market research, strategic analysis and consulting services to technology companies worldwide.

VDC offers its clients a wide variety of research solutions tailored to meet their strategic business needs. These include highly customized consulting engagements, ongoing research services and select industry investigations. Through our considerable industry contacts, we also provide services related to acquisitions and the generation of key account leads.

For further information and pricing on "2001/2002 Global Relay Market Intelligence Service" go to:
www.vdc-corp.com/components/annual/01/br01-15.html

John Gordon, Senior Analyst -
jgordon@vdc-corp.com

Marc Regberg, Senior Vice President -
msr@vdc-corp.com

Venture Development Corporation
One Apple Hill Drive, Box 8190, Natick, MA 01760
Tel: 508-653-9000 Fax: 508-653-9836 Web: http://www.vdc-corp.com