Technology/ Contract Manufacturing/ Industry models 1 comments

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They say a picture tells a thousand words. The illustration below showing how the various links within the electronics supply chain has been outsourced successively over the years gives one a good idea of the industry models in existence today: the EMS (electronics manufacturing services) providers and the ODMs (Original Design Manufacturers).

Design and Manufacturing Services Outsourcing:


EMS providers typically provide components procurement, PCBA assembly, box assembly and testing services ie. the whole gamut of manufacturing services.

ODMs, originating in Taiwan, operate under a different model. They sell finished goods to OEMs who then label and sell them under their own brands. Since they invest in their own R&D and own intellectual property, they typically command higher margins.

References:
(1) PWC: Electronics Manufacturing report