Electronic manufacturing services in Finland This CBI fact sheet aims to introduce electronic manufacturing service (EMS) providers from developing countries (DCs) to the electronic manufacturing service market in Finland. It is a medium-sized market in the EU; Finnish production accounted for about 5-10% of total EU EMS production in 2008. The best trade channel for DC exporters is to partner with local EMS providers.

Market characteristics - EMS1

• Finland is a small market for electronic assemblies in the EU. It is the

sixteenth largest, behind Austria and Ireland, but ahead of Portugal and

Estonia. Apparent demand in 2010 totalled €1.1 billion, after an annual

decline of 19% in the period 2007-2010.

• Finland is a small producer of electronic assemblies in the EU. It is the

thirteenth largest, behind Denmark, but ahead of Spain and Romania.

Production in 2010 totalled €968 million, after an annual decline of 11% in the

period 2007-2010.

• Finland accounted for 5.0-10% of EU EMS production in 2008, or equivalent

to around €1.5-3.0 billion of industry turnover. Historically, EMS production in

Finland has been highly dependent on the outsourcing strategy of the

country’s leading electronic equipment producer, Nokia. However, since

2009, when Nokia reduced the subcontracting activities to EMS providers, the

role of Nokia in Finnish EMS production has been limited.

• As a result of the presence of Nokia in the country, a major competence of

the domestic EMS industry is communication electronics. This dependency

on Nokia was also a major reason for Elcoteq’s (Finland’s largest EMS

provider) bankruptcy in October 2011, as Nokia switched to cheaper Asian

suppliers a few years ago. Even though the Nokia sales show a massive

decline, Finland is still known for a free climate for technical innovation, as

Nokia used to both lead and swallow up technical innovation.

• Communication electronics remain important in the Finnish EMS industry.

Other competences of the Finnish EMS providers lie in industrial automation,

measuring equipment and medical electronics. EMS in Finland can now be

best characterised by low volume high mix production.

• Finland is home to several large and medium-sized EMS providers. Foreign

multinational providers operating in the country include Partnertech (complex

mechatronic systems), Foxconn (computer, communication and consumer

electronics), Flextronics (industrial, aerospace, medical and industrial),

Sanmina-SCI (communications, computer, automotive, medical and defence)

and Enics (industrial and medical). In addition, it is home to Scanfil

(communications; ranks 38th in the world), Incap (equipment in energy

1 Electronic assemblies are used as an indication for EMS.

Electronic manufacturing services in Finland

Source: CBI Market Information Database - www.cbi.eu • Contact: marketinfo@cbi.eu

• www.cbi.eu/disclaimer • Publication date: 09.12.2011 • Compiled for CBI by Facts Figures Future in

collaboration with Mr. Guenther P. Fandrich.

efficiency; ranks 8th

in Scandinavia), Darekon (medical and industrial

electronics; has a facility in Poland) and PKC Group (medical and industrial).

• Relocation to lower cost countries has been an important on-going trend in

Finland where the phenomenon is known as ‘Chinese syndrome’. Not

surprisingly, Asia is an important location, chosen by Nokia, Incap, Perlos

and Aspocomp, to name but a few. The on-going price war in some market

segments (mainly communication electronics) has been the main driver of

production relocation. In addition to Asia, another important destination of

electronics high volume low mix production is the Baltic region.

• As a result of large drops in imports of electronic assemblies in 2007 and

2009 (-47% and -31% respectively), in the period 2006-2010 imports declined

by 18% per year, which was a higher decline than the development in the EU

on average. The year 2010 was marked by high growth (26%) and imports

amounted to €300 million in that year.

• Imports from developing countries (DCs) totalled €56 million in 2010. They

dropped faster than total imports in the period under review, thus the share

declined (from 36 to 19%).

• China accounted for 94% of all imports coming from DCs. China was followed

by Thailand (2.5%), Croatia (1.0%), India (0.7%), Malaysia (0.5%), Mexico

(0.3%), Brazil (0.2%) and the Philippines (0.2%). Of the main DC suppliers,

only Croatia experienced growth (+82% per year).

• Labour costs for electronic assembly activities in Finland are among the

highest in the EU.

Market characteristics - electronics

• The Finnish electronic equipment market is the fifteenth largest in Europe.

Demand in 2009 totalled €72 billion (ZVEI, 2010). The market declined

sharply (by 16%) in 2009. The market started to recover slowly in the second

half of 2010 (2010 on average demand declined by about 2%) and is

expected to keep growing slightly in 2011 and 2012.

• Electronics is regarded as a key driver of the Finnish economy due to its

significant contribution to the country’s industrial exports. Finland is an

important producer of communication electronics, including digital

transmission systems, exchangers, mobile phones, subsets, amplifiers and

antennas.

• Beside Nokia, a leading supplier of communication technology and one of the

largest EU’s electronics group, Finland is also home to electronic equipment

producers from other sectors. They not only represent key buyers of EMS,

but are also main investors in technology. Examples are Datex Ohmeda

(medical) and Vaisala (measure electronics). Other examples of main

companies that make use of EMS services are ABB, Kone, Metso, RAY, Te

Switch and Vacon. All these companies need EMS for the industrial

electronics segment.

• In contrast to production activities, Finnish electronics and technology

companies are increasingly concentrating their R&D activities in Finland. The

country has a strong base of highly specialised technological institutions,

which are strongly connected to electronics companies. The industry invests

a lot in R&D, with a current focus on nanotechnology.

For more information on buyer requirements, trends, trade structure and prices,

please refer to the modules concerning the EMS market in general.

Trade channels and finding trading partners The best prospects for DC EMS providers are Finnish EMS providers that

subcontract some of their production activities, because it does not fit in with their

other EMS activities. Reasons for subcontracting can be the volume or the type of

Electronic manufacturing services in Finland

Source: CBI Market Information Database - www.cbi.eu • Contact: marketinfo@cbi.eu

• www.cbi.eu/disclaimer • Publication date: 09.12.2011 • Compiled for CBI by Facts Figures Future in

collaboration with Mr. Guenther P. Fandrich.

product. DC EMS providers should explore which Finnish EMS providers don't

have a global manufacturing strategy yet, since these companies may still be

looking for cooperation partners. The best way to approach them is visit or

participate at trade fairs in Finland, or at the EU’s leading electronics fair

Electronica (http://www.electronica.de), which is held in Munich, Germany every

even year (November). The Internet is a valuable source to find prospects. Useful

websites are:

• Alihankinta - http://www.alihankinta.fi - subcontracting fair, including EMS.

Select English language, go to ‘Exhibitors 2012’, select ‘Product Groups’,

and look at the electronic section. Held in in Tampere annually in September.

• Association of Suppliers of Electronic Components and Measuring Equipment

- http://www.elkomit.fi - go to ‘Jäsenet’ for a list of members.

• Finnish Foreign Trade Agents’ Federation - http://www.agenttiliitto.fi -

association of commercial agents, importers and distributors. Choose the

English version and click on ‘Partners’ to find companies by product groups.

• Luettelomedia - http://www.luettelomedia.fi - Finnish company directory;

search with ‘Electronics and components’.

• Sopimusvalmistus - http://www.expomark.fi - subcontracting fair, including

EMS, held in Oulu every even year (May).

• Subcontractor - http://www.easyfairs.com - manufacturing trade fair, including

the IT sector, held in Helsinki yearly (March).

• Tekniikka - http://www.jklpaviljonki.fi/tekniikka2010 - fair for automation and

production technology, held in Jyväskylä every even year (October).

Interesting players Finland hosts several EMS providers. Examples are:

• Aspocomp - http://www.aspocomp.com - EMS provider that produces HDI,

RF applications, metal-back heatsink PCBs.

• Enics - http://www.enics.com - EMS provider, headquartered in Switzerland.

• Incap - http://www.incap.fi - EMS provider.

• Mariachi - http://www.mariachi.fi - EMS provider that is specialised in medical

electronics.

• Mitron - http://www.mitron.fi - designs and produces electronics for

information and security systems in transport.

• MLB - http://www.mlb.fi - EMS provider.

• PKC - http://www.pkcgroup.com - EMS provider.

• Scanfil - http://www.scanfilems.fi/eng - EMS provider.

• Sirico - http://www.sirico.fi - EMS provider.

Other useful sources

• Doing business in Finland - http://www.kwintessential.co.uk/resources/global-

etiquette/finland-country-profile.html.

• EETimes - http://www.electronics-eetimes.com - monthly electronics

magazine, European edition.

• Federation of Finnish Technology Industries -

http://www.teknologiateollisuus.fi - provides useful market information on the

electronics and other technological sectors.

• Finnpartnership - http://www.finnpartnership.com - promotes trade with DCs.

Register for free to use their matchmaking service. Also publishes information

on exporting to Finland.

• Prosessori - http://www.prosessori.fi - monthly online electronics magazine.

• Tekniikka & Talous - http://www.tekniikkatalous.fi - weekly technology and

economy magazine.