LiteratureReviewonOutsourcinginElectronicsIndustryinChinaWordcount:2,0001.0introductionOutsourcingreferredtoverticalspecialization.Itissimplythefarmingoutofabusinessfunctiontoathirdpartyanditcoversacontractualagreementonexchangeofservicesandpayments.Severalresearcheshaveacknowledgedsignificanceofoutsourcing.Calafforeseesanincreasingtrendofcompanies’outsourcingtheirproductionstootherswhoareexpertiseinproductmanufacturing(MasonandCole,2003).Apartfromhisconcern,outsourcingalsodrawsattentionfromresearcherslikeScottJ.Mason,DieterErnst,MasaakiKotabeandsoon.Whattomentionisthattheseresearchespaytheirspecialattentiononprocessofoutsourcing,orsomenewtechniquedevelopmentappliedinoutsourcing.HoweverthereisalackofstudytheevolutionprocessofOutsourcinginspecialIndustrytoidentifysomeintrinsiclawsduringtheevolution.ThepurposeofthisessayistochooseElectronicsIndustryasatypicalexampletofillthisgaptostudythedevelopmentprocessofOutsourcinginElectronicsIndustrymakealiteraturereviewaboutChina’scurrentoutsourcing,historicaldevelopmentofoutsourcingandeffectsofoutsourcing，andtoidentifysomeintrinsiclawsduringtheevolution2.0EvaluationofOutsourcinginElectronicsIndustry2.1EvolutionofGlobalOutsourcingOvertime,therearethreeerasthroughthehistoryofelectronicsmanufacturing:vacuumtubeeratransistoreraandintegratedcircuitera.Theyhavewitnessedhowoutsourcingemergedandevolved.Mason’sstudyshowsthatapproximately10yearsagonomorethan5percentageofallmanufacturingwasoutsourced.However,globalcomponents’sourcingwasseenasasignificanttrendamongmanufacturingcompanies(Quinn,1999;Kotabe,2002;Mol,etal.,2005).Whiletherebeganasurgeinmanufacturingoutsourcingonlargescaleinthemid-1990s.Then,overtime,changeshadtakenplacewiththedevelopmentofeconomyandtechnology,thankstowhichproductsgrewmoreandmorecomplicated(Delattre,etal.,2003).ArealizationhasemergedthatelectronicsmanufacturersshouldboostinvestmentsincapitalequipmentandcontractmanufacturingstartedtogroInresponse,outsourcingbecomeanefficientapproachforOEMstocutcost,focuscorecompetition,respondquicklytonewchangesandtotightenplanningprocesses.AlDelattre,TomHessandKenChiehcomposedanessayonelectronicsmanufacturingtransformationinchangingbusinessclimates.Theydidacomparisonjobbetweentoday’soutsourcingandmoretraditionalforms.Onemajordifferenceisthatpartnersnowmustworktogethertoconfrontwithstrategicriskandtoachievestrategicoutcomes.Anotherisstandardofperformanceevaluationsystem--performanceisevaluatedbynotjustreductionofcost,butalsobyrevenue,earningspershareandmarketshare(Delattre,HessandChieh,2003).Finally,today’soutsourcingishighlydependentupontightconnectionbetweenpartners.Theessayalsodemonstrateshowtomakethemostofoutsourcingarrangement.“Innovationiswidelyacknowledgedtobeamajorsourceofeconomicgrowth.”DieterErnstputsitinhisessay.HedemonstratesthattheleadersofAsia’selectronicsindustryareundertakingatransitiontowardscommerciallyviableinnovationandthatAsianfirmswillbegivennewopportunitiestoimprovetheirinnovativecapacities.Andinnovationdevelopsduetotheemergingofglobalnetworkseconomywhosecharacteristicscoververticalspecialization(alsocalledoutsourcing),globalnetworkintegrationandIT-basedinformationmanagement(Ernst,2003;EggerEgger,2003).ThisimpliesthatoutsourcingisnolongerrestrictedtomanufacturingbutnowextendstoRDactivitiesandeveryotherstagesofthevaluechain.With“integration”ascomple...