Electronic Manufacturing Services Market - By Product (Electronic Manufacturing, Engineering Services, Test & Development Implementation, Logistics Services), By Application & Forecast 2024 - 2032

Electronic Manufacturing Services Market Size

Electronic Manufacturing Services Market was valued at USD 580.2 billion in 2023, growing at a CAGR of over 5% between 2024 and 2032. The demand for outsourced manufacturing services is being driven by the increasing use of smartphones and other smart devices, which is a major growth driver for the industry.
 

The demand for smartphones and other smart gadgets is rising as customers depend more and more on them for productivity, entertainment, and communication. The demand for personal connectivity is not the only factor driving this spike; advanced features like high-resolution displays, potent processors, and sophisticated sensors are all factors. Original equipment manufacturers (OEMs) in the smartphone and smart device industries are looking to EMS providers for effective and affordable manufacturing solutions to meet the ever-increasing demand and quickly changing technological requirements.
 

EMS businesses contribute significantly to the creation of smart gadgets and smartphones by providing design, engineering, manufacturing, and supply chain management skills. OEMs can take advantage of economies of scale, access cutting-edge facilities, and their specific talents by outsourcing manufacturing to EMS providers. As EMS providers take care of the intricate details of production, OEMs are free to concentrate on their primary skills, which include product creation, marketing, and sales. Moreover, EMS suppliers are excellent at meeting the demands of the smartphone and smart device industry, which are dynamic and require quick time-to-market and flexible production quantities.
 

For instance, according to the GSMA Mobile Economy report, the number of 5G devices reached 17% in 2023 and will rise to over 54%, i.e., approximately 5.3 billion connections by 2030. This will increase the adoption of 5G-based consumer electronics devices, such as smartphones, tablets, laptops, and wearables, augmenting market growth.

Electronic Manufacturing Services (EMS) firms may find it beneficial to concentrate on high volume services at first, but there are important drawbacks in the same sector. Having too much reliance on a small number of important customers or contracts for large-scale production is one significant obstacle. EMS companies that rely too much on a small number of clients may find themselves at risk from supply chain disruptions, shifts in client preferences, and variations in demand. Furthermore, price pressure is a common result of the fierce competition in the EMS industry, especially in high-volume contracts, which over time can reduce profit margins. Furthermore, giving high-volume services priority could take focus and funds away from diversification initiatives, which would limit the company's potential to profit from developing markets, specialized services, or niche markets.
 

Electronic Manufacturing Services Market Trends

The consumer electronics sector is witnessing increased technological innovations in the fields of advanced packaging of electronics, semiconductor memory solution developments, and high-end processors. The rising production & consumption of smart devices, smartphones, and wearables will increase the demand for electronic manufacturing services. As a result, electronic manufacturing services companies will provide services such as assembling, designing, testing, and prototyping of PCBs, and cables & modules.

To improve productivity and accuracy in production processes, the electronic manufacturing services (EMS) market is witnessing a number of significant trends, one of which is the growing utilisation of sophisticated manufacturing technologies including automation, robots, and the Internet of Things. A growing number of supply chain interruptions and the demand for more adaptable and dependable supply chains have led to an increased focus on supply chain resilience and localization. The adoption of eco-friendly techniques and circular economy ideas by EMS providers to lessen their environmental impact is another way that sustainability is becoming a major priority. Furthermore, there is a growing need for complex assembly procedures and miniaturization, especially in the automotive, healthcare, and consumer electronics industries where sophisticated, small, and multipurpose electronic devices are becoming more and more necessary.
 

The rising demand for robotics and industrial automation in various manufacturing facilities is expected to drive the market growth during the forecast period. Using robotics in electronics manufacturing reduces costs and improves quality throughout the whole production process. Electronic manufacturing services in robotics can inspect & test products, adhesives & sealants, and pack & palletize finished goods.
 

Electronic Manufacturing Services Market Analysis

Based on application, the market is divided into computer, consumer electronics, aerospace & defense, medical & healthcare, automotive, semiconductor manufacturing, robotics, agriculture, power & energy, and others. The computer segment is expected to register a CAGR of over 7% during the forecast period.
 

• The market's computer section includes the manufacturing and assembly of desktops, laptops, servers, and other relevant gear. The ongoing need for computing devices in a variety of industries, such as corporate settings, IT services, and consumer markets, makes this segment essential. This category of electronic manufacturing service providers handles everything from component assembly to full system integration and testing, responding to changing customer and technology needs. Considering the rapid technological development in computers, electronic manufacturing service providers must constantly update their manufacturing tools and technologies.
   
• The computer industry is especially vulnerable to shifts in consumer preferences and technological developments such as the move toward cloud computing and the decline in sales of conventional desktop PCs. Due to these changes, electronic manufacturing services providers must continue to be adaptable, placing a high priority on flexible manufacturing systems that can change course fast in response to changing customer and company demands. For example, the market for laptops and mobile workstations has recently grown significantly due to the expansion of e-learning and remote work, necessitating quick adjustments to inventory control and manufacturing schedules.
   

Based on product, the market is divided into electronic manufacturing, engineering services, test & development implementation, logistics services, and others. The electronic manufacturing segment dominated the global market with a revenue of over 650 billion in 2032.
 

• At the core of the electronic manufacturing services market is the electronic manufacturing segment, which deals with the production and assembly of electronic goods and components. This category serves numerous sectors including industrial manufacturing, consumer electronics, automotive, aerospace, and healthcare. In this industry, electronic manufacturing service providers handle a wide range of tasks including design & prototyping, assembly, testing, and after-market support.
   
• This segment's ability to incorporate cutting-edge technologies into the manufacturing process is one of its main advantages. This includes robotics and automation, which save labor costs, increase production rates, and greatly improve precision & efficiency. Furthermore, more complicated designs and quick prototyping are made possible by advancements in additive manufacturing and 3D printing, which speed up the development of new products and enable the creation of unique manufacturing solutions. By providing Design for Manufacturability (DFM) services, electronic manufacturing service suppliers in the electronic manufacturing sector are also heavily involved in the design phase. DFM ensures that goods are manufactured efficiently, cutting expenses and decreasing waste in the process. This early engagement expedites time-to-market and improves product quality in addition to streamlining the manufacturing process.
   

Asia Pacific dominated the global electronic manufacturing services market in 2023, accounting for a share of over 40%. The robust infrastructure for electronics manufacturing, the availability of skilled labor, and lower operating costs have propelled the region to a prominent position in the global market for electronic manufacturing services. Key centers to produce electronics are in countries including China, Taiwan, South Korea, and Vietnam, which provide substantial benefits in terms of productivity and cost. These locations appeal to multinational electronics businesses looking to outsource their manufacturing operations owing to the robust support provided by these governments in the form of subsidies, industrial parks, and advantageous trade regulations.
 

Automation, the Internet of Things (IoT), and sophisticated data analytics are some new technologies that the Asia Pacific market is quickly embracing. The increased demand for consumer electronics, automobile electronics, and industrial equipment is met by these technological breakthroughs, which also improve productivity and manufacturing processes. Major component and semiconductor manufacturers in the area also ensure a well-connected supply chain, reducing lead times and enhancing electronic manufacturing service providers' logistics.
 

In June 2022, Flex expanded its automotive industry operations in Jalisco, Mexico. The company built a new 145,000-square-foot state-of-the-art facility that serves as the strategic in-region automotive manufacturing hub dedicated to producing advanced electronic components that will accelerate the adoption of electric and autonomous vehicles.
 

The U.S. continues to lead the electronic manufacturing services industry, especially in design and innovation. American Emergency Medical Services (EMS) providers are well-known for their dedication to the technical industries, such as aerospace, defense, and healthcare, where accuracy and dependability are critical requirements. Modern technologies, such as IoT, AI, and robotics, are widely used in the U.S. market and are integrated into industrial processes to improve productivity and quality. The U.S. of America sustains its competitive advantage through technological leadership and a robust intellectual property framework, even in the face of competition from low-cost manufacturing regions. Trade restrictions and labor costs, for example, continue to affect market dynamics and drive some manufacturing offshore while also drawing foreign investment in specialized segments.

The focus on quality and innovation, especially in consumer electronics and automotive components, sets apart Japan's electronic manufacturing services business. Japan has a long history of developing cutting-edge technology and precision engineering, which benefits electronic manufacturing services providers operating in the country. This region excels at integrating cutting-edge electrical components into consumer and industrial goods and has significant R&D capabilities. Japan's approach to electronic manufacturing services is based on continuous improvement and lean manufacturing techniques that improve productivity and quality of output. However, Japan faces difficulties such as the need to diversify into new markets and technology, as well as a declining domestic market brought on by an aging population.
 

The electronic manufacturing services market in South Korea is extremely vibrant and strongly linked to the country's thriving semiconductor and display sectors. Being the home of global electronics giants, such as Samsung and LG, South Korea gains from vertical integration in these fields, which speeds up the development and uptake of new technologies including 5G and flexible screens. The electronic manufacturing service providers in the area excel in high-volume production and are skilled in scaling manufacturing processes. Significant government investment in R&D, especially in developing technology, is also observed in South Korea. Diversification is becoming important for South Korean electronic manufacturing service providers as the region's extreme reliance on a small number of powerful businesses presents risks.

China's vast manufacturing capacity and cost-effectiveness have made it the biggest and most significant player in the global electronic manufacturing services market. For many years, the nation has served as the global manufacturing hub, drawing in international businesses with its size and speed. Chinese EMS suppliers are now part of the complete design and production process, having risen the value chain from their previous role as simple assemblers. Through programs, such as "Made in China 2025," the country is making a strong push to produce high-tech goods, such as semiconductors and renewable energy technologies. Although issues with environmental laws and intellectual property protection persist, China's position in the market is being strengthened by ongoing advancements and investments in these fields.
 

Electronic Manufacturing Services Market Share

Foxconn (Hon Hai Precision Industry Co., Ltd.) & Compal Electronics, Inc. hold a significant share of over 35% in the electronic manufacturing services industry. Foxconn offers end-to-end solutions, ranging from product development and manufacturing to distribution and post-purchase services. With its extensive global network of facilities, the corporation can produce at a large scale, which is essential for satisfying the demands of key customers such as Apple, Dell, and Sony.
 

Compal's operations strategy, which prioritizes responsiveness and flexibility, allows it to quickly adjust to shifting customer demands and market situations. This flexibility is essential in a sector defined by shifting consumer tastes and quick technical advancements. Compal's capacity to oversee mass production while upholding superior quality and efficiency is another important aspect that contributes to its popularity among Original Equipment Manufacturers (OEMs). Furthermore, Compal has a broad geographical reach, establishing production plants in several countries beyond Taiwan including China, Vietnam, and Brazil.
 

Both Foxconn and Compal Electronics have carved out dominant positions in the EMS market through strategic growth initiatives, continuous investment in technology, and maintaining strong relationships with major global brands, making them pivotal players in the electronics manufacturing landscape.
 

Electronic Manufacturing Services Market Companies

Major players operating in the electronic manufacturing services industry are:

• Benchmark Electronics
• Celestica
• Compal Electronics, Inc.
• Fabrinet
• FLEX LTD
• Foxconn (Hon Hai Precision Industry Co., Ltd.)
• INTEGRATED MICRO-ELECTRONICS, INC.
   

Electronic manufacturing services Industry News

• In October 2023, Tata Electronics Pvt Ltd (TEPL) acquired Wistron’s operations in India for USD 125 million, becoming the first Indian company to manufacture Apple iPhones the Wistron acquisition will spur the next cycle of investment in the Indian electronics manufacturing ecosystem and signal the maturing of the country’s contract manufacturing companies.
   
• In March 2022, Sanmina Corporation (Sanmina), a leading integrated manufacturing solutions provider and Reliance Strategic Business Ventures Limited (RSBVL), a wholly owned subsidiary of Reliance Industries Limited (RIL), the biggest private sector business in India, reached an agreement to establish a joint venture through investment in Sanmina's current Indian entity (Sanmina SCI India Private Ltd, "SIPL")
   

The electronic manufacturing services (EMS) market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue (USD Billion) from 2021 to 2032, for the following segments:

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Market, By Product

• Electronic manufacturing
  • PCB assembly
  • Cable assembly
  • Electromechanical assembly/box build
  • Testing
  • Prototyping
  • Others
• Engineering services
  • Circuit design
  • PCB layout
  • Others
• Test & development implementation
  • Component-level testing
  • Circuit assembly testing
  • Fully assembled unit testing
  • Others
• Logistics services
  • Inventory management
  • Remanufacturing
  • Others
• Others

Market, By Application

• Computer
• Consumer electronics
• Aerospace & defense
• Medical & healthcare
• Automotive
• Semiconductor manufacturing
• Robotics
• Agriculture
• Power & energy
• Others    

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Rest of Europe
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• MEA
  • UAE
  • Saudi Arabia
  • South Africa
  • Rest of MEA