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The global Electronic Manufacturing Services (EMS) market size was valued at USD 503.91 billion in 2022 and is projected to grow from USD 534.62 billion in 2023 to USD 856.20 billion by 2030, exhibiting a CAGR of 7.0%. North America dominated the global market with a share of 35.30% in 2022.
The demand for electronic manufacturing services is estimated to grow due to rising product adoption across healthcare, automotive, and industrial applications. Additionally, service providers heavily focus on providing functionalities such as sub-assembly manufacturing, testing, designing Printed Circuit Boards (PCBs), and component assembly & re-engineering. These factors are expected to drive the market growth over the forecast period.
Besides, electronic manufacturing services companies invest heavily in increasing industrial output and implementing new technologies, contributing to establishing new worldwide standards. Organizations in this industry have adopted several technological transformations, such as virtual reality, the Internet of Things (IoT), and 3D printing, to expand their production capability. To obtain high-value components and mass customization, market participants are now creating partnerships with a variety of original Equipment Manufacturers (OEMS), Original Design Manufacturers (ODMs), and other partners.
Disruptions in Electronics Supply Chain amid COVID-19 Stalled Market Growth
The outbreak of coronavirus affected the demand for electronic manufacturing services owing to the pandemic’s severe effect on the global electronics supply chain. The COVID-19 pandemic impacted key market players, with their revenues declining significantly.
Furthermore, the pandemic adversely impacted the electronics manufacturing industry in 2020 attributed to factors such as disrupted supply chain of components, limited technology movement & worksite coordination, cybersecurity, and under-absorption of fixed costs. For instance, several companies faced shortages of certain electronic components, especially for capacitors, connectors, memory (both DRAM and Flash), and LCD panels. As a result, companies experienced reduced productivity levels throughout their facilities in the first and second quarters of 2020. For instance, Jabil Inc. stated that its factories were running at roughly 65-70% capacity on the verge of the COVID-19 pandemic.
The impact on the electronics manufacturing industry was anticipated to be far more extensive provided the virus impacted other main industrial countries beyond Germany, India, China, and the U.S.
However, in the long term, the industry was anticipated to get back strongly on track seeing an increase in product development and demand across the healthcare, automotive, computer, and communication sectors. Key areas included the demand for remote monitoring electronic devices that enabled companies to continue working amidst lockdown. For instance, in September 2020, Benchmark Electronics, Inc. partnered with DnaNudge (U.K.-based company) to deliver DnaNudge’s re-engineered lab-free RT-PCR COVID-19 testing system volume production.
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Increasing Awareness of E-Waste Recycling is a Growing Trend
The growing awareness about e-waste recycling is supporting the market growth. In July 2020, UN’s Global E-waste Monitor 2020 stated that global e-waste volume increased by around 21% in 2019. It is also predicted that, by 2030, the global e-waste discarded products with plug or batteries would reach 74 Mt, almost double in just 16 years. This has led government authorities and OEMs to develop several e-waste recycling strategies and initiatives.
For instance, Singapore’s nationwide electronic and electrical waste (e-waste) management system started in July 2021. It resulted in inconvenience for recycling of e-waste for consumers. The system acts as a circular economy approach toward being a zero-waste nation. During the same period, Switzerland and Ghana joined forces to combat and eliminate e-waste.
Furthermore, in March 2020, the European Commission (EC) presented a new circular economy. The proposal has one of its priorities on reducing electrical and electronic waste. The plan specifically outlines immediate goals such as the “right to repair” and improving overall recycling and reusability. It includes reward systems to support the recycling of electronics products and an introduction of common chargers. This will aid in reducing overall e-waste and create awareness regarding reusability and recycling.
Improvement of Greener Electronic Devices to Strengthen Market Prospects
The emergence of green electronic devices is driving the electronics manufacturing services market growth. These devices are manufactured with recyclable parts, non-toxic chemicals, and reduced carbon emissions during production. It helps reduce carbon footprints, lower energy consumption, and improve process control.
The growing concerns about the rising e-waste across the globe have led to the innovation of greener electronic products. According to the Global E-waste Monitor 2020, a report published in collaboration with the UN Environment Program (UNEP), in 2019, around 53.6 million metric tons of e-waste was produced. Raw materials contained in that e-waste were valued at USD 57 billion.
The increasing carbon emission, primarily while producing electronic devices, led electronic manufacturing services providers to adopt sustainable plans to reduce emissions. Henceforth, key market players are focusing on strategic planning to manufacture greener electronics devices, thereby driving the global market growth.
Violation and Lack of Intellectual Property Rights to Hamper Market Growth
Intellectual Property (IP) rights are essential for offering secure legal protection to the innovative creation of electronics devices as they provide a competitive edge to business owners.
The violation of such rights not only invades the innovator's and investor's privacy policies but also restrains the economic development across the market. Generally, small and medium-sized enterprises focus on rapid growth in the market while avoiding the importance of IP rights (IPR) that promises to offer ample business opportunities within a safer environment. Developing economies encounter issues in devoting resources for strengthening intellectual property systems. Therefore, the key market players need to modify their primary manufacturing process and securely attain IP rights. Thus, violation and lack of such IP rights are expected to hinder the market growth.
Engineering Services to Show Strong Growth Backed by Rising R&D by Electronic Assembly Materials Manufacturers
By service, the market is segmented into electronics manufacturing services, engineering services, logistics services, test & development implementation, and others.
Amongst these, engineering services are best positioned to capture the highest CAGR during the forecast period. The growth is attributed to manufacturers' increasing R&D of superior performance electronic assembly materials. Furthermore, the electronics manufacturing services segment has captured the highest market share in 2021. This is attributed to the growing importance of circuit boards across tablets and other electronic devices.
The test & development implementation and logistics services segments are growing substantially. The market players are adopting outsourcing services to improve flexibility and reduce cost. The upsurge in electric vehicles has also increased the outsourcing of component manufacturing, thereby propelling the electronic manufacturing services market growth.
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Consumer Electronics Industry to Experience High Growth Owing to Favorable Government Initiatives
Based on industry, the market is classified into consumer electronics, automotive, heavy industrial manufacturing, aerospace & defense, healthcare, IT and telecom, and others.
The consumer electronics segment is expected to lead the market with the highest CAGR during the forecast period due to initiatives enforced by governmental bodies across the U.S., India, and other countries. Additionally, these initiatives accelerated the demand for consumer electronics, computers, and communication devices, driving this market in IT and telecom applications.
The automotive and aerospace & defense segments have been boosted due to rising digitization, increasing IoT-enabled cars, and growing purchase of electric vehicles over the forecast period. For instance, according to the International Energy Agency (IEA), electric car sales reached 3 million in 2020, which is 40% up from 2019 and in 2020. Europe leads the electric car market, followed by China and the U.S.
Asia Pacific Electronic Manufacturing Services (EMS) Market Size, 2022 (USD Billion)
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In terms of geography, the market is segmented into North America, Europe, Asia Pacific, the Middle East & Africa, and South America.
The Asia Pacific Electronic Manufacturing Services Market size was valued at USD 177.88 Billion in 2022 and is growing at a CAGR of 8.5% from 2023 to 2030. In 2021, Asia Pacific accounted for the largest Electronic Manufacturing Services market share, and is projected to continue to expand significantly throughout the forecast period. China is one of the most important markets for electronic manufacturing services worldwide, owing to its substantial manufacturing units of consumer electronics, semiconductors, and other telecommunications devices and machinery manufacturing.
Furthermore, due to global lockdown during the COVID-19 pandemic, the demand for consumer electronic devices in China had increased to implement the work from home culture. This increased the demand for consumer electronic devices, propelling the Asia Pacific market growth. In addition, the rising growth of India’s manufacturing industries could become an engine for electronic equipment manufacturing in the coming years.
In 2020, the North America EMS market experienced significant growth, with plenty of opportunities for future expansion. The region's urban growth and stable population growth are expected to drive consumer electronics consumption in middle and high-income households. The availability of low-cost consumer electronic products for including smart home products, smartphones, and televisions from a range of local manufacturers is helping to increase their adoption among low-income individuals. The youth's familiarity with new technology also boosts the demand in this region.
North America's strong financial position also allows it to make significant investments in R&D. The region's increased structural electronics penetration and the rapid application of structural electronics in sensors, solar devices, and conductors in high-end autos and space vehicles are also expected to contribute to the market growth in future.
European market has been growing steadily in recent years due to several factors. One major factor contributing to the growth of this market in Europe is the region's strong focus on innovation and technology. Many European companies are looking to outsource their electronic manufacturing needs to companies to focus on their core competencies and stay competitive in a rapidly evolving market. Another driver impelling the Europe EMS market growth is the increasing demand for electronic products across a variety of industries, including automotive, healthcare, aerospace, and defense. EMS providers can offer these industries cost-effective solutions for producing high-quality electronic components and devices, driving the growth of the market.
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The Middle East & Africa and South America markets are primarily driven by extensive R&D, adoption of electric cars, and rise of consumer and automotive electronics. Further, the increased use of IoT and 3D technologies across several industries is expected to strengthen the structural electronics demand over the projected period. Also, due to the small number of automotive electronics manufacturers, worldwide suppliers have a great opportunity to focus on local demand, making the Middle East and South America appealing to investors.
Key Players Focus on Developing Advanced EMS to Strengthen Competition
Global electronics manufacturers such as Hon Hai Precision Industry Co. Ltd (Foxconn), Jabil Inc., Sanmina Corporation, Flex Ltd, and Benchmark Electronics, Inc. are launching distinctive solutions with modern technologies such as Artificial Intelligence (AI), ML, and others. In addition, the market's intense competition prompts service providers to focus on acquisition methods to enhance their positions.
An Infographic Representation of Electronic Manufacturing Services (EMS) Market
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The research report provides an in-depth analysis of the market. It focuses on key areas such as prominent firms, products, and product applications. Further, the study provides an insight into market trends as well as highlights major industry advancements. In addition to the aspects mentioned above, the research includes a number of critical variables that have contributed to the mark growth in recent years.
CAGR of 7.0% from 2023 to 2030
Value (USD Billion)
By Service, Industry, and Region
Fortune Business Insights says that the market stood at USD 503.91 billion in 2022.
In 2030, the global market is expected to be valued at USD 856.20 billion.
The market is set to exhibit a CAGR of 7.0% during the forecast period (2023-2030).
Asia Pacific is anticipated to be the dominant region, which stood at USD 177.88 billion in 2022.
In the industry segment, the IT and telecom sub-segment is expected to witness the highest CAGR during the forecast period.
Increasing e-waste recycling in electronics manufacturing is the key trend in the global market.
Upsurge in demand for greener electronics devices is driving the market growth.
Sanmina Corporation (U.S.), Hon Hai Precision Industry Co. Ltd (Foxconn) (Taiwan), Benchmark Electronics Inc. (U.S.), Flex Ltd (Singapore), Jabil Inc. (U.S.), Celestica Inc. (Canada), Wistron Corporation (Taiwan), Plexus Corporation (U.S.), Fabrinet (Thailand), COMPAL Inc. (Taiwan), and others are the major companies in the market.
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