With increasing need for cost-effective production of automobiles and consumer electronics, the Electronic Manufacturing Services (EMS) Market has gained enormous momentum over the last twenty years. Consistent rise in the consumption of mobile phones, portable electronics and connected devices overall has helped the growth of several small EMS players to meet the global demand. Vast opportunities in the aerospace, industrial and medical devices segment have also boosted the electronic manufacturing services industry. More recently, the communication and consumer electronics segment have driven EMS providers to pursue key expansion strategies and technological developments.
The demand for green and energy-efficient devices & components that creates a need for these services further contributes to the electronics manufacturing services market growth. To cater to these demands, OEMs are developing strategic partnerships with the service providers that aids them in controlling manufacturing costs. The service providers offer product design, development, and manufacturing operations according to the demand from OEMs. Due to these facilities, OEMs achieve appropriate product supplies and save major development costs. This trend allows the electronic manufacturing services (EMS) market players to develop green manufacturing facilities and energy-efficient products that support the global sustainable goals.
Electronic manufacturing services (EMS) market will be driven by the electronic manufacturing, which is expected to exceed 55% of the revenue share due to the continuous demand for electronic components in various industry verticals such as automotive, consumer electronics, and others. The products include manufacturing of printed circuit boards, microelectronics, optoelectronics, and radio frequency & wireless devices for the electronics, medical, and telecommunication applications.
The growing concerns regarding the production of technically and legally compliant products by the OEMs enforce them to utilize these products on a larger scale. This is attributed to the efficiency, high-quality, and application-specific products offered by the service providers. Moreover, these providers also offer services based on the low to high quantity of product demand from OEMs.
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Automotive electronics manufacturing services market will grow at a CAGR of around 5% in the coming years owing to the penetration of electronic devices and components in vehicular systems. Increasing utilization of automotive electronics including electronic systems, sensors, and ECUs in the safety, comfort, and infotainment devices creates a demand for EMS. Auto manufacturers develop contracts with the EMS providers for a continual supply of the electronic components. EMS market players have developed specialized design, manufacture, and diagnostic services for the automotive companies. For instance, Actia Group offers automotive industry-specific services to its vehicle manufacturing customers by supporting the production standards such as ISO TS 16949.
The U.S. electronic manufacturing services (EMS) market dominates the global industry; the electronic manufacturing services demand in the country is estimated to exceed USD 70 billion by 2024. The emergence of several manufacturing companies across all industry verticals in the U.S. has increased competition and enforced OEMs to partner with the EMS providers.
Additionally, increasing government rules to produce safe and tested electronic products to be used in industrial applications, such as medical devices and automobiles, supports EMS market growth. To save the labor costs involved in manufacturing and logistics operations, OEMs in the U.S. are shifting toward electronics contract services. These factors coupled with the growth in outsourcing activities account for the rapid development in the industry.
All in all, with unprecedented growth in the demand for consumer electronics over the next few years, the electronic manufacturing services market will witness tremendous inflow of capital for expanding production capacities. Constant innovations, for instance EMS company New Kinpo Group’s AI-powered manufacturing robots and autonomous manufacturing capabilities, will further attract OEMs towards Asian companies.
Key players dominating the global electronic manufacturing services (EMS) market share include Foxconn, Integrated Microelectronics, Inc., Benchmark Electronics, API Technologies Corp., Celestica, Inc., New Kinpo Group, Venture Corporation and Sanmina Corporation.