The Electronic Contract Assembly Market was valued at USD 105.41 billion in 2019 and is expected to reach USD 178.74 billion by 2025, at a CAGR of 9.2% over the forecast period 2020 - 2025. Volatile economic conditions have compelled manufacturers to reassess traditional business models and concentrate on the bottom line. Thus, a majority of the executives view contract assembling as an opportunity to reduce costs, improve flexibility, and streamline production processes.
- With the rising competition in the electronics industry, increasing cost reduction pressure and decreased product lifecycles, the demand for electronics contract assembly market has boosted globally.
- The trend to shift price-sensitive manufacturing to low-cost regions will influence the industry for all suppliers in the foreseeable future. The market operates in a highly competitive environment particularly the players located in Taiwan and China are providing very economical subcontracted services for manufacturing compared to other regions.
- However, as the lack of control over production and quality concerns related to the manufactured products may hamper the global electronics contract manufacturing services market in the future.
Scope of the Report
Electronics manufacturing services (EMS) are a form of engineering and manufacturing outsourcing services that provide a wide range of core manufacturing capabilities. Moreover, outsourcing of ancillary activities helps OEMs focus on their core competencies, which further helps them improve their operational efficiencies and reduce production costs and need for fixed capital investment.
Key Market Trends
Consumer Electronics to Witness Significant Growth Over the Forecast Period
- Outsourcing has become a critical element in keeping the electronics industry expanding and handling costs to the margin each year, which is a leading factor in stimulating consumer demand.
- Furthermore, demand for high-performance, ultra-thin, and light displays with interactive, quick reacting interfaces are pushing material requirements to the edge. These prerequisites are pushing new advances in display materials technology for a variety of applications, from ITO replacements for touch screens to display innovations for flexible devices.
- Leading OEMs like Apple also employ electronic contract manufacturing from Foxconn, which employs approximately 350,000 people and produces about half of the world's iPhones.
- Apple is a pioneer in smartphones market with a significant market share and requires contract assembly services for their smartphones, and thus thereby driving the electronics contract assembly market globally.
Asia-Pacific is Expected to Witness the Fastest CAGR Over the Forecast Period
- Asia-Pacific is expected to witness the fastest growth rate in the electronic contract manufacturing services market in the future, owing to the high adoption of electronics contract manufacturing services model by major countries, such as China, South Korea, India, Taiwan, and Japan.
- The low-cost labor and availability of raw materials are some of the factors influencing the electronic assembly services in this region. in result, China has transformed into a major hub of electronics production.
- Further, Taiwan is also expected to hold a significant share of this regional market, due to its ability to have an upper hand in the more profitable segment of ODM (Original Design Manufacturer) and the presence of most of the EMS companies in the country.
- All these factors anticipate the Asi- Pacific region to dominate the electronics contract manufacturing services market over the forecast time period.
The electronics contract assembly market is fragmented and is quite competitive in nature. Few of the key players are Amphenol Interconnect Products Corp. (AIPC), ATL Technology, Compulink Cable Assemblies Inc.etc among others. Market players in developing economies are offering low-cost, outsourced services to the production and designing sectors to increase their competitiveness. Furthermore, key players are striving to gain a competitive advantage by engaging in mergers and acquisitions.
- July 2018 - Connect Group NV chose the Aegis' FactoryLogix digital MES platform, across its manufacturing sites to offer the executive management and traceability. FactoryLogix operates end to end throughout the whole production flow, no matter where it might be located.
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