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The electronics manufacturing services market is estimated to grow at a CAGR of 6.6% between 2022 and 2027. The size of the market is forecast to increase by USD 167.02 billion. The growth of the market depends on several factors, including the increasing number of electronics manufacturing services providers in economies with low hourly wages, reduced time to market and improved access to emerging markets, and the growing focus on core competencies or on compensating for lack of in-house expertise.
This report extensively covers market segmentation by end-user (computing and consumer appliances, telecommunication, industrial, automotive, and others), service type (electronics design and engineering, electronics assembly, electronics manufacturing, and others), and geography (APAC, North America, Europe, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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Technavio categorizes the global electronics manufacturing services market as a part of the global electronic equipment and instruments market within the overall electronics market. The parent global electronics market includes manufacturers of communications equipment, technology hardware storage and peripherals, electronic equipment and instruments, electronic components, consumer electronics, and industrial electronics products, as well as electronic manufacturing services. Our research report has extensively covered external factors influencing the parent market growth during the forecast period.
The increasing number of electronics manufacturing services providers in economies with low hourly wages are notably driving the market growth, although factors such as the risk of intellectual property theft and misuse may impede the market growth. Our researchers analyzed the data with 2022 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.
Key Electronics Manufacturing Services Market Driver
The increasing number of electronics manufacturing services providers in economies with low hourly wages is the key factor driving global electronics manufacturing services market growth. One of the key factors driving the growth of the global electronics manufacturing services market is significant cost savings derived from delegating work to electronics manufacturing services providers in low-cost economies. The reduction in costs for electronics manufacturing services providers associated with maintaining technology infrastructure, manufacturing space, operations, and staffing, has been a key factor supporting their expansion in low-cost countries. Electronics manufacturing services providers benefit from labor arbitrage through the maintenance of a lean workforce and reduced spending on employee hiring and retention.
Easy and direct access to skilled talent and advanced technologies in low-cost countries has also been increasing the presence of electronics manufacturing services providers in such economies. The outsourcing of electronics manufacturing to such electronics manufacturing services 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 electronics manufacturing service providers. This is propelling the growth of the market in focus.
Key Electronics Manufacturing Services Market Trend
The collaborative co-innovation partnership with electronics manufacturing services providers is the primary trend in the global electronics manufacturing services market. Collaborative partnerships in outsourcing call for risk sharing and value sharing, deriving from the joint functioning between the customer organization and the outsourcing service provider. 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 electronics manufacturing services adoption are deepening each year, many companies are continuing to operate their outsourcing relationships successfully through extensive collaborations and co-innovations. electronics manufacturing 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 market in focus.
Key Electronics Manufacturing Services Market Challenge
The risk of intellectual property theft and misuse is a major challenge to the global electronics manufacturing services market growth. The risk of intellectual property (IP) theft is a key challenge that the global electronics manufacturing services market faces. Many electronics businesses keep their manufacturing designs classified and have stringent policies in place, which restrict them from outsourcing manufacturing to electronics manufacturing 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 vendors usually work on a contract basis for their customers, and these electronics manufacturing service providers cater to the needs of multiple businesses simultaneously. Despite detailed documentation, which takes place before the contract is awarded to an electronics manufacturing services 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 electronics manufacturing services providers' end. This is limiting the growth of the market in focus.
Key Electronics Manufacturing Services Market Customer Landscape
The report includes the adoption lifecycle of the 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.
Global Electronics Manufacturing Services Market Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
bench.com - 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 vendors, including:
Qualitative and quantitative analysis of vendors 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 vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
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 centers, 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 camera, artificial intelligence (AI), virtual assistant, fingerprint sensor, and facial recognition.
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The computing and consumer appliances segment was valued at USD 120.27 billion in 2017 and continue to grow by 2021. 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 vendors operating in the market under focus.
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APAC is projected to contribute 59% by 2027. 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 global electronics manufacturing services 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 electronics manufacturing 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.
This report forecasts the contribution of all the segments to the growth of the market. In addition, we have included the COVID-19 impact and the recovery strategies for each segment. COVID-19 led to an upsurge in demand for APAC. However, with the initiation of vaccination drives, the reopening of the global markets offered a favorable environment to automakers in APAC to increase the production of vehicles, which in turn will boost the growth of the regional electronics manufacturing services market. This will continue to drive the growth of the electronics manufacturing services market in the region during the forecast period.
The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. The market has been segmented by End-user (Computing and consumer appliances, Telecommunication, Industrial, Automotive, and Others), Service Type (Electronics design and engineering, Electronics assembly, Electronics Manufacturing, and Others), and Geography (APAC, North America, Europe, South America, and Middle East and Africa).
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Electronics Manufacturing Services Market Scope |
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Report Coverage |
Details |
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Page number |
179 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 6.6% |
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Market growth 2023-2027 |
USD 167.02 billion |
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Market structure |
Fragmented |
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YoY growth (%) |
5.55 |
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Regional analysis |
APAC, North America, Europe, South America, and Middle East and Africa |
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Performing market contribution |
APAC at 59% |
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Key countries |
US, China, Taiwan, Japan, and Germany |
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Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Accton Technology Corp., Benchmark Electronics Inc., Celestica Inc., Compal Electronics Inc., Creation Technologies LLC, Data I/O 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. |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period. |
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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. |
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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 Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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