Interesting item today from Frost & Sullivan, the research firm, which asserts medical OEMs are primed to begin outsourcing to EMS providers.

Frost pegs the North American electronics medical device market at $3.79 billion in 2006 and estimates it will rise to $8.09 billion in 2013. This tends to be a higher margin, lower volume segment, ideal for onshore EMS companies. However, because of the certifications and liabilities that come with building for Class 2 medical and Class 3 equipment, many OEMs are understandably nervous about putting their fates in the hands of their suppliers.

Currently, medical makes up roughly 3% of the worldwide EMS market. Frost, to its credit, points out the daunting hurdle: “While the future for EMS providers appears highly promising, stringent guidelines implemented by the Food & Drug Administration (FDA) pose a barrier to entering the medical device market. Adhering to FDA regulations and others such as ISO 13485 has become critical since medical OEMs often select EMS providers for their outsourcing needs based on their compliance with current regulatory standards.”

I’m always leery of forecasts of revolutions. But a 113% or so rise in revenues in an as-yet tiny market spread over seven years sounds like the right prognosis.

Thankfully, I’ve never experienced anything short of supreme hospitality at China manufacturing plants. But, as this account of a New York Times’ reporter who wanted to learn about a Chinese manufacturer details, not all the press are welcome there. In search of information on the factory accused of building thousands of now-recalled Thomas the Tank Engine toys, he found himself detained by company security, over which even local police and government officials had no sway.

Ubiquitous research firm iSuppli feels a China backlash is coming, with OEMs rediscovering other Southeast Asian nations as manufacturing hotspots. In a new white paper, Validating Vietnam, the firm specifically fingers Vietnam as a likely candidate for a resurgence.

Well, maybe. Few doubt Vietnam’s possibilities; we published an article from EMS provider Spartronics Jason Craft last October that explained the nation’s potential in detail. But Vietnam will remain small potatoes compared to its SE Asia neighbors. The Philippines and Malaysia, I would argue, with their comparatively long histories of electronics manufacturing, are in better shape to catch China’s scraps.

That’s if there are any scraps to be had. Incredibly, China is still scratching the surface of being a player. Most of the country remains untouched by the rest of the world. When they run out of low-cost workers in Shenzhen and Shanghai and Beijing, companies will move inland. And iSuppli’s own data forecast China remaining on the road toward its goal of becoming The World’s Workshop.

It’s reassuring to read that all the world’s eggs won’t end up in one basket. Truth is, they never were going to. But I think it’s a stretch to think Vietnam, to name one, will emerge as anything more than a third tier player.

Flextronics announced the purchase of rival Solectron today. If the deal goes through, it will return Flex to the top of the EMS leaderboard, outpacing fast-growing Foxconn. Still, is this the right buy and at the right time?

Perhaps more than any of its competitors, Flex has shown it can absorb and integrate other companies with minimal amount of operational — and financial — disruption. However, Solectron would be, in revenue terms, the largest deal Flex has done, and probably the most complicated. Reason: Solectron has had, at best, a spotty financial record. Time was, the company was the star of the industry. But Winston Chen isn’t walking through the executive door again, and the latest CEO, Mike Cannon, jumped ship for Dell in February. Sales are off 10% since 2004, even while the EMS industry at large has returned double-digit growth. And the company’s stock has remained submerged, despite the improving balance sheet.

Perhaps Flex was encouraged by Solectron’s improving profitability over the past two years. Or maybe it felt that its rival’s last two quarters, which put the company on a run rate of about $11.75 billion, are evidence Solectron has turned the corner.

Either way, I’m wary that this may be too much, too soon, even for Flex. Foxconn has been growing at 25% a year clip, and perhaps Flex felt it needed a big move to close the gap. This would do it, and then some. But biggest doesn’t always mean best. Hope I’m wrong.

Sen. Hillary Clinton (D-NY) unveiled her “innovation plan” to a large group of Silicon Valley executives Thursday. Among her bullet points:

On paper at least, it sounds good. Look for more of this as the presidential candidates seek Californians’ votes — and their checkbooks.

P.S. In response to a few inquiries, this is not an endorsement of Clinton. The point I’m making is that we should be looking at the candidates’ proposals and making assessments of their merit. My belief is that energy is the critical issue facing America today, and by focusing Americans’ attention on coming up with an all-encompassing solution, we might also renew broad and intense interest in engineering and other sciences, much in the way President Kennedy did with the Moon mission in the 1960s.