Electrical - Electrical Industry in Mixed Moods

While the electrical market lasts to mature, original equipment manufacturers (OEM), original design manufacturer (ODM) and moulders confront mounting pressure to reduce costs as struggling to achieve the optimal balance of functionality, appearance, productivity and cost reduction. However, dangers sometimes come with chances. Up-and-coming global outsourcing tide brings hopes to contract manufacturers. In facing the changeover, they react with mingled mood, half caution and half relief.

Motors Sizzling with Growing Replacement DemandsAlthough motors fix to their traditional design architecture, the innovation of miniature DC drive systems never ceases as industrial players continue to combat in achieving the next level of miniaturization, power to volume, and precision. Manufacturers work hard to customize to clients' needs by providing a wide spectrum of custom and semi-standard options, including special bearing systems and lubrication, special commutation and brush systems, special coil voltages, extended temperature range versions, custom lead wires connectors, and cabling, modified shaft configurations, thru-shafts, and hollow shafts and modified motor geometry. Large IEC frame motors, which consist of frame sizes IEC80 to IEC500, account for the biggest share of market revenue and over the next few years is predicted to remain the major revenue contributor. Motor continues to be a sizzling market. According to the latest statistics from IMS Research, the low voltage segment of this market in Europe, the Middle East and Africa (EMEA) is expected to reach $1.7 billion. A crucial factor that contributes to this market's overall robustness is the high proportion of motors that are made each year for replacement.

Battery Powered up 6.6% through 2008It is predicted that world demand for primary and secondary batteries will climb 6.6% percent per year through 2008 to $65 billion. The growth momentum mainly comes from some developing regions such as Africa and the Mid-East, Eastern Europe, Latin America and Asia/Pacific, boosted by regional robust economic growth. Especially, China, Argentina, India, Iran, South Korea and the Ukraine will play the crucial roles too grab the best gains. The markets in industrialized countries like U.S. EU and Japan will also benefited from higher income levels, which result in mounting sales and use of many battery-powered products.

In the past decade years, there were several new batteries launched such as nickel-metal hydride, secondary lithium, zinc-air designs, rechargeable alkaline and lithium-ion, widely applied in portable computers and portable cordless hand tools. First developed in the 1960s and commercialized in 1970s, lithium batteries now have six lithium battery types, approximately 30 commercialized electrode couples, and over thousand specific designs. The new generation of lithium batteries has large scale of sizes available from king-size cells used for powering vehicles or storing significant amounts of utility power to queen-size cells capable of powering micro-electromechanical gears. The lithium battery technology takes the place of once-popular alkaline batteries and NiCad batteries and some tentative uses of NiMH batteries because of its inherent higher energy density, compact and longer operational time to meet the demands of next-generation portable electronics.
The sales of consumer-orient battery will outpace other market segments, spurred by soaring demand for products used to power high-drain portable electronic devices. The demands of non-lead-acid secondary batteries tend to outpace that for primary and lead-acid secondary types through 2008, fueled by the popularity of multifunction handheld devices with reduced recharging time. Lead-acid batteries keep gaining market in terms of value thanks to stronger growth in automotive output as the uses rise from the population of some applications like backup power supplies and industrial motive power.

Relays & Switches Get MinimizedRelays and switches continue to get minimized as jog switches and joy sticks are shrinking in size in offering more sophisticated user interface with cell phones, PDA's, and other consumer electronics. The trend toward smaller loads, voltage, and amperage signal a more significant design challenge to switch and relay manufacturers than minimizing their physical size. Two of the prime drivers heading to smaller loads are portable, rechargeable devices and the nearly ubiquitous. Switch sales improved 17% in the first half of 2004 and soared largely in Q2 2004 as compared to the same period of last year, yet the market has declined in Q3 and predicted to further slow down in 2005. Still the switch market should still outperform the overall economy in 2005.

OEM & ODM Booming with Globalization OutsourcingIt's difficult to find any company that completely manufactures its own products as most manufacturers in Europe and the United States make use of outsourcing to lower overall product cost. In response to changing global economic climate, world major players focus on giving the OEM greater flexibility, improved cost effectiveness, reduced cycle time, reduced time to market, and sustained or higher quality. In this case, outsourcing must be a valuable component of manufacturing strategies. Especially when demand is stable, inventory-holding costs low and labor a high proportion of total costs--overseas production in low-wage countries is a very attractive idea. In addition, when in changing economic situation, outsourcing can minimize the risk of dramatic change on business circle. Industry players could free themselves to spotlight on their core competencies and tighten R&D capability.The original design manufacturers (ODMs) market grows stronger than OEMs (original equipment manufacturer) thanks to they will diversify their product offerings to their OEMs customers. ODMs also tends to outpace the electronics manufacturing services (EMS) market by about 11.5% annually and climb from about $40 billion in 2003 to $101 billion in 2008 while ODMs expand globally by adding product offerings and strengthening their design capabilities. Nevertheless, the EMS market will keep growing while its sales increase from about $92 billion in 2003 to more than $160 billion in 2008.

From ttnet.net