Contract Manufacturing is one of the fastest growing segments in the IT-industry. Growth rates have been averaging 20-25 per cent per year during the 1990s, the current recession in the IT-industry has interrupted the growth but most likely not ended it. According to industry consultants Technology Forecasters, the global market volume in the year 2000 was $ 88 billion. The leading players of the industry, most of them former small subassembly companies, were hardly known a decade ago. In the year 2001, the biggest firm had annual revenues of more than $ 15 billion. Market concentration has been developing rapidly with five companies of North American origin (Solectron, Flextronics, SCI, Celestica and Jabil Circuits) emerging as the key players. The names of these companies are unfamiliar even to many insiders, since CM-providers do not post their brand name on any product. The Los Angeles Times, therefore, called the EMS-industry a system of “stealth manufacturing”.

Contract manufacturing integrates a wide array of productive functions pertaining to circuit board and hardware assembly, as well as product engineering at the board and systems level, component design, process engineering, parts procurement, product fulfilment, logistics and distribution, and after-sales services and repair or sometimes installation services. From the standpoint of the labor process, these functions can be grouped around the design and assembly of printed circuit boards and related components, the final assembly of systems (called box-build) and logistics and inventory-related work (Lüthje, Schumm and Sproll 2002). Contract manufacturers are serving a growing range of product markets from Personal Computers and servers, over Internet routers and switching gear, to communications equipment (especially mobile phones), consumer products such as computer game or television sets, industrial and automotive electronics, as well as space and aircraft electronics.

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