Manufacturing the Internet of Things or
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1 Manufacturing the Internet of Things or Is the Internet of Things a Non-linear opportunity for the Electronics Manufacturing Supply Chain? Markus Riester EPoSS Annual Forum 2015, October 13, 2015
2 How can the electronics manufacturing supply chain benefit from the exponential growth proposition of the Internet of Things? Electronics manufacturing supply chain Internet of Things 1
3 What is the IoT? The IoT is the network of all Smart Things communicating over the Internet with something else without human interaction and that have some sort of sensing mechanism. Source: McKinsey & Company / GSA report The Internet of Things, 2015 Source: 2
4 More dough through IoT More Bread, More Dough: How IoT Boosted Bakery Production 11 IoT connected machines resulted in an additional 180,000 pounds of bread compared to traditional unconnected. 3
5 Connected devices by bn devices millions 12.7bn devices From: The Internet of Things: The next growth engine for the semiconductor industry, 2015, PwC 4
6 IoT market in 2020 bn US$ From: The Internet of Things: The next growth engine for the semiconductor industry, 2015, PwC 5
7 6
8 CAGR for IoT Devices (proposed) Research company CAGR (%) BI Intelligence Harbor IDC Cisco ABI Research Gartner PwC Figures in billion IoT devices 7
9 Exponential growth of things 1,E+13 trillion 1,E bn 1,E bn 1,E+10 billion 1,E bn 1,E+08 1,E+07 million 1,E+06 1,E+05 Mobile Phones: number of phones Internet users: number of users Internet of Things: number of things (forecast) maristechcon Data sources: Gapminder, wikinvest 8
10 Manufacturing e xhibit 2 Manufacturing value added was growing globally until the financial crisis Real value added in manufacturing Constant 2000 $ trillion World Compound annual growth rate 3% High income Middle income Low income 16% of global GDP (2012) SOURCE: World Bank; McKinsey Global Institute analysis 9
11 Market conditions electronics manufacturing Chart 2 World PCB Shipments (with forecast) Fluctuating Exchange Rates $ Billions Growth calculations: Europe = Eurostat Wiring Device Japan & N. America from JPCA & IPC data Taiwan/China:46 rigid & flex company composite Rest of Asia growth = Taiwan/China 44 company composite Includes S Korea data for % +2.8% % Actual Forecast Source: Walt Custer Consulting Group Calendar Year Source: Custer Consulting Group base year expanded by monthly growth of N. American, European, Japanese & Taiwan/China monthly PCB shipments 10
12 How can the electronics manufacturing supply chain benefit from the exponential growth proposition of the Internet of Things? Electronics manufacturing supply chain Internet of Things 11
13 Semiconductor operating model - revisited Develop the supply chain to deal with the new market structure imposed by the IoT Integrated: develop all solutions in-house, or acquire and merge them to form a new entity with enhanced capabilities. Collaborative: establish preferred suppliers for critical hardware components and software that co-develop application relevant solutions, and drive the entry into product developments Platform-based: Establish a (open source?) system platform, allowing developers to leverage a proven solution for fast development of products. 12
14 The opportunity is in the EMS Supply chain Possible fields of growth for electronics manufacturing through the advent of the IoT (qualitative) 13
15 Conclusions IoT is a reality it is all around us, even if we can t always tell and it will continue to grow The supply chain will need to adapt, and there will be major changes for the benefit of B2B and B2C customers this process has started and will gain momentum Value creation will govern what goes 14
16 Supporting businesses in the Electronics Manufacturing Supply chain 15
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