European enclosure fabrication based on CEM-UK/Ireland focus

Citation

(2001), "European enclosure fabrication based on CEM-UK/Ireland focus", Soldering & Surface Mount Technology, Vol. 13 No. 1. https://doi.org/10.1108/ssmt.2001.21913aab.001

European enclosure fabrication based on CEM-UK/Ireland focus

European enclosure fabrication based on CEM-UK/Ireland focus

Keywords: United Kingdom, Ireland, Fabrication

The general CEM market is moving forward apace exhibiting excellent growth opportunities. The UK/Ireland region, having been the first to move towards CEM, now finds its growth subsiding as CEM uptake in other regions increases. This is especially true for Eastern Europe.

At the same time increased competition is evident with recent new entrants in enclosure based CEM, such as Trend, and industry consolidation in evidence. This intense competition has resulted in the "organic sales development" market continuing to be very difficult – vis-á-vis the "acquire a site" market which still has some way to go, especially in telecommunications.

In addition some opportunity exists, for the global CEM, in taking major OEM business from small local fabricators.

Growth in enclosure fabrication based CEM is forecast at 20-30 per cent PA.

European enclosure fabrication based CEM split by region

Today the UK/Ireland region, having had the weight of North American inward investment in computer, mass storage and networking sectors, is the largest.

Having said this much of the high volume computing CEM is likely to move to Eastern Europe and therefore, in the future, the UK/Ireland region's dominance of this sector will fade. The same may be said for the Nordic and German speaking regions but to a lesser extent.

Figure 1 shows the European enclosure fabrication based CEM-regional split in May 2000 ($1.825 billion).

Figure 1 European enclosure fabrication based CEM - regional split - May 2000 $1.825 billon

UK/Ireland

Recently many global, or globaling, CEMs have increased enclosure fabrication based CEM in the UK and Ireland. APW has made various acquisitions and, more recently, Trend and Flextronics Enclosures Division have followed suit.

Telecommunications

There are a significant number of telecom-munications OEM sites remaining in the UK/Ireland region. It is through the divestment of these sites that UK telecommunications CEM will grow – vis-á-vis organic growth. Here MHM expects to see a continuing divestment from companies such as Nortel and Marconi.

In the telecommunications sector many OEMs are currently in transition to CEM, therefore there is much to play for.

Computing

The UK/lreland region enclosure fabrication based CEM in computing is fairly well established. Therefore there is less to play for unless the movement from UK/Ireland to Eastern Europe is counted, as an opportunity.

Mass storage

Major change in the mass storage sector includes IBM's growth Dublin along with EMC's accompanying Irish growth.

Networking

In some ways the networking sector is being consumed by the telecommunications sector (e.g. Alcatel/Newbridge, Nortel/Bay and Marconi/Fore). Cabletron is likely to be accounted for by Flextronics but there is certainly growth at the Cisco account, to focus on. Cisco's growing Irish and Scottish bases are newly developing targets.

Other

Clearly there remains companies such as NCR, whose outsourcing attitude can change over time.

UK/Ireland regional summary

MHM see the following opportunities in the UK/Ireland region:

• •

  telecommunications plants transfer (Marconi, Nortel and others likely);

• •

  transfer UK/Ireland fabrication to eastern Europe;

• •

  growth in Ireland.

Further details: Mike Hannon, MHM, Technology Research Centre, Ayr. Tel: +44 (0) 1292 263625; Fax: +44 (0) 1292 265081; E-mail: mhmayr@msn.com