PUBLICATIONS & REPORTS

Contents Introduction

The outsourcing of product-related functions has recently become widespread and led to the rise of “Electronics Manufacturing Services (EMS)”. This business model is epitomized by a handful of huge, mainly North American, contract manufacturers such as Flextronics, Solectron, Sanmina-SCI, Celestica, and Jabil Circuit. Taiwanese subcontractors have also become indispensable strategic partners for major computer and IT companies, and recently developed global production networks to rival those of the American EMS business. This paper compares the performance of these two groups of EMS firms finding that Taiwanese firms have generally been more profitable in recent years. Higher profitability of Taiwanese companies is attributed to several factors including maintaining higher revenue growth, better performance in efficiency measures, and much more investment in R&D.