Enjoy complimentary customisation on priority with our Enterprise License!
The electronics manufacturing services market is estimated to grow by USD 164.6 billion at a CAGR of 6.21% between 2023 and 2028. The increasing number of EMS providers in economies with low hourly wages allows companies to benefit from cost-effective manufacturing solutions. Additionally, reducing time to market and improving access to emerging markets is crucial for staying competitive in the industry. Moreover, the growing focus on core competencies or compensating for the lack of in-house expertise drives companies to partner with EMS providers for specialized services, further fueling market growth. The trend towards outsourcing manufacturing to EMS providers is driven by the need for flexibility, scalability, and cost-effectiveness. EMS providers offer a range of services, including design, assembly, testing, and logistics, allowing companies to focus on innovation and core business functions. As the demand for electronics continues to grow, especially in sectors like consumer electronics, automotive, and healthcare, EMS providers play a crucial role in meeting this demand and driving market growth. It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2018 to 2022.
To learn more about this report, Download Report Sample
The market share growth by the computing and consumer appliances segment will be significant during the forecast period. Computing and consumer appliances include consumer electronics devices, data centres, and consumer appliances. The major reason for the growth of this segment is the rise in demand for consumer electronic devices such as smartphones, tablets, laptops, AR/VR devices, gaming consoles, and wearable devices. The developments in the telecommunication network infrastructure are driving the demand for consumer electronic devices. The rising competition in the global smartphone market due to the emergence of several low-cost smartphones is leading to the development and introduction of smartphones with advanced features such as multiple-lens cameras, artificial intelligence (AI), virtual assistant, fingerprint sensor, and facial recognition.
Get a glance at the market contribution of various segments Request a PDF Sample
The computing and consumer appliances segment was valued at USD 123.40 billion in 2018. The growing population, improving economic conditions, increasing employment rate, and rise in income levels are driving the demand for computing and consumer appliances, which are broadly classified under consumer electronics. Some of the most popular products in this segment are laptops, air conditioners, audio products, refrigerators, televisions, and washing machines. The demand for such products has been increasing every year, owing to the growing employment rate and changing consumer lifestyle. In addition, high competition in the consumer electronics sector has led manufacturers operating in this sector to differentiate their product offerings, which, in turn, led them to outsource manufacturing services to the companies operating in the market under focus. Hence, such factors are fuelling the growth of this segment during the forecast period.
For more insights on the market share of various regions Request PDF Sample now!
APAC is projected to contribute 55% by 2028. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. APAC is expected to continue its dominance in the market during the forecast period. The region is home to several international companies owing to the availability of low labor costs and supportive government policies. China is a global hub for international electronic manufacturers. Despite international companies trying to reduce their reliance on Chinese imports, the share of this regional market will remain the largest till the end of the forecast period as companies are expanding their facilities in other APAC countries such as India, Vietnam, Malaysia, and Thailand. These APAC countries are witnessing the implementation of various favorable policies and initiatives to ramp up their domestic manufacturing across various industries, such as automotive, computing and consumer appliances, and telecommunication. Hence, such factors are driving the market in APAC during the forecast period.
The market plays a crucial role in various industries, such as healthcare, automotive, and sub-assembly manufacturing. EMS providers offer a range of services, including PCB design, component assembly, and re-engineering. With the advent of technologies like IoT, 3D printing, and virtual reality, EMS companies are witnessing a surge in demand for services. They cater to OEMs and ODMs, providing essential components like capacitors, connectors, and LCD panels. The industry is also focusing on e-waste recycling and engineering services to meet sustainability goals and cater to the growing demand for smart home products and smartphones. Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The increasing number of electronics manufacturing services providers in economies with low hourly wages is the key factor driving the market growth. The reduction in costs for service providers associated with maintaining technology infrastructure, manufacturing space, operations, and staffing, has been a key factor supporting their expansion in low-cost countries. These service providers benefit from labor arbitrage through the maintenance of a lean workforce and reduced spending on employee hiring and retention. This includes increased productivity levels, product development, adoption of new technologies, participation in the electronics manufacturing industry, engagement in e-waste recycling, provision of engineering services, and collaboration with OEMs.
Easy and direct access to skilled talent and advanced technologies in low-cost countries has also been increasing the presence of these service providers in such economies. The outsourcing of electronics manufacturing to such service providers not only allows businesses to scale operations on-demand in line with their operational requirements but also enables them to improve their profit margins by negotiating better deals with these service providers. This is propelling the growth of the electronic manufacturing services (EMS) market focus during the forecast period.
The collaborative co-innovation partnership with electronics manufacturing services providers is the primary trend in the market. At the same time, co-innovation refers to the two parties managing the flow of knowledge across organizational boundaries to jointly develop new solutions and products that create significant value for both.
Although the risks and challenges associated with services adoption are deepening each year, many companies are continuing to operate their outsourcing relationships successfully through extensive collaborations and co-innovations. These services providers are regarded as integrated strategic partners of their clients' supply chains under such instances. The customer company itself is invested in the functioning of its outsourcing partner and may be involved in the continuous monitoring of offshore locations to ensure optimum quality of operations and management. Such developments are expected to make the market ecosystem more favorable for growth during the forecast period, which will, in turn, drive the growth of the electronic manufacturing services (EMS) market in focus during the forecast period.
The risk of intellectual property theft and misuse is a major challenge to market growth. Many electronics businesses keep their manufacturing designs classified and have stringent policies in place, which restrict them from outsourcing manufacturing to these service providers. The purpose of these policies is to aid the company in preventing theft or leakage of critical or classified product designs.
EMS providers or companies usually work on a contract basis for their customers, and these service providers cater to the needs of multiple businesses simultaneously. Despite detailed documentation, which takes place before the contract is awarded to a service provider, there still are concerns among customers regarding the potential loss of IP technology and designs, data theft, and the misuse of these technologies at the service providers' end. This is limiting the growth of the market in focus during the forecast period.
The report includes the adoption lifecycle of the electronic manufacturing services (EMS) market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the electronic manufacturing services (EMS) market.
Bench- The company offers electronics manufacturing services such as mechanical and precision machining, microelectronics, and PCB assembly.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.
You may also interested in below market reports:
The market is witnessing significant growth due to the increasing demand for designing Printed Circuit Boards (PCBs), component assembly & re-engineering, and the rise of the Industrial Internet of Things (IoT). The market is driven by Original Equipment Manufacturers (OEMs) and Original Design Manufacturers (ODMs) seeking to streamline their operations and reduce costs. However, challenges such as disruptions in the electronics supply chain due to events like the coronavirus pandemic and the need for technology movement & worksite coordination are present. Companies are also focusing on greener electronic devices and embracing the Circular economy to address concerns such as E-waste. In sectors like Aerospace & Defense, IT and Telecom, and Electric vehicles, the demand for EMS is expected to grow due to advancements in 3D technologies and the increasing adoption of structural electronics in vehicles.
The market is influenced by various factors such as industrial output trends, the supply chain of components, and challenges like under-absorption of fixed costs. Key segments driving growth include memory (both DRAM and Flash), and the rising demand for remote monitoring electronic devices. EMS companies play a crucial role in the industry, navigating issues such as Intellectual Property Rights (IP) and Global E-waste concerns highlighted in the Global E-waste Monitor 2020. With a focus on sustainability, the market is moving towards a Zero-waste nation model and enhancing Logistics services to support this shift. Urban and population growth, coupled with the work from home culture and increased youth familiarity with new technology, are driving demand for Structural electronics in various sectors, including high-end autos, space vehicles, and IoT-enabled cars. This growth is also fueled by initiatives such as the International Energy Agency (IEA) promoting electric car sales and the expansion of Electronic equipment manufacturing. As a result, there is a rising demand for EMS from Automotive electronics manufacturers seeking to integrate advanced electronics into their vehicles.
Market Scope |
|
Report Coverage |
Details |
Page number |
193 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 6.21% |
Market growth 2024-2028 |
USD 164.6 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
5.75 |
Regional analysis |
APAC, North America, Europe, South America, and Middle East and Africa |
Performing market contribution |
APAC at 55% |
Key countries |
China, US, Taiwan, Japan, and Germany |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Accton Technology Corp., Benchmark Electronics Inc., Celestica Inc., Compal Electronics Inc., Creation Technologies LLC, Data IO Corp., Elbit Systems Ltd., ESCATEC Sdn. Bhd., First International Computer Inc., Flex Ltd., Hon Hai Precision Industry Co. Ltd., Integrated Micro Electronics Inc., Jabil Inc., Key Tronic Corp., Kimball Electronics Inc., Kitron ASA, Neo Tech Inc., Plexus Corp., Sanmina Corp., and Venture Corp. Ltd. |
Market dynamics |
Parent market analysis, Market forecasting, market report, market forecast, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, Market growth and Forecasting, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Service Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
Get the report (PDF) sent to your email within minutes.
Get lifetime access to our
Technavio Insights
Quick Report Overview:
Cookie Policy
The Site uses cookies to record users' preferences in relation to the functionality of accessibility. We, our Affiliates, and our Vendors may store and access cookies on a device, and process personal data including unique identifiers sent by a device, to personalise content, tailor, and report on advertising and to analyse our traffic. By clicking “I’m fine with this”, you are allowing the use of these cookies. Please refer to the help guide of your browser for further information on cookies, including how to disable them. Review our Privacy & Cookie Notice.