Brazil's contract manufacturing market is poised to double in size over the next five years, according to an analyst at iSuppli Corp.
Moves by the Brazilian government to spur trade and encourage investment in electronics manufacturing and design will drive contract manufacturing activity in the country to grow from $3 billion in 2006 to $6.2 billion by 2011, reported Adam Pick, iSuppli's principal analyst for the EMS/ODM sector, in a recent newsletter.
Electronics manufacturing services (EMS) providers are expected to represent 97.8 percent of that revenue, with 2.2 percent coming from original design manufacturers (ODMs). EMS providers already established in Brazil, such as Foxconn, are expanding their facilities, while others are planning to enter the market soon, according to iSuppli (El Segundo, Calif.).
Pick noted a number of factors for the coming surge in Brazil, including plans by semiconductor manufacturers to establish chip fabs there. While Brazil's economic growth might be outpaced by China and India, for certain types of electronics manufacturing Brazil is considered an attractive, lower-cost alternative to either of these Eastern locales.
Pick also noted the domestic market for computers, wireless devices and networking gear is poised for strong growth, even as Brazil's participation in the MERCOSUR South American free-trade group is likely to increase exports to surrounding countries.
A crack-down on piracy has also made Brazil a more favorable destination for electronics manufacturers, he said.