Electronics Manufacturing Services Market By Application (Automotive, Aerospace & Defense, Consumer Electronics, Healthcare, IT & Telecom and Others), and Service Type (Manufacturing Services, Engineering Services, Test & Development and Others), and Region - Market Perspective, Market Intelligence, Comprehensive Analysis, Historical Data, and Forecast for 2023 - 2032

Market Perspective

The global Electronics Manufacturing Services Market size was worth around USD 484.46 billion in 2022 and is projected to attain a valuation of USD 902.59 billion by 2032 with a CAGR of 6.42% between 2023 and 2032.

EMS provides various engineering, manufacturing, and outsourcing services, allowing companies to gain operational efficiencies and focus on key tasks such as research and development (R&D). End-use application demands from healthcare, automotive and consumer electronics have increased the demand for electronic manufacturing services. High competition amongst key players operating in the market has resulted in companies providing additional services such as testing and developing products and services. Substantial growth in recent years has resulted in higher capital investments to develop the output and adoption of new technologies.

Asia Pacific and North America have been prominent players in recent years and are estimated to continue progressing throughout the forecast period. Europe is anticipated to grow steadily due to rising demands from various regional sectors. The rapid urbanization of Latin America is estimated to show substantial results late in the forecast period.

Key Insights

• Based on application, it & telecom segment held the largest market share
• Based on service type, the manufacturing services segment generated the highest revenue
• On the basis of region, Asia Pacific accounted largest market share

Increasing Functionalities and End-Use Applications of EMS Will Drive the Market

Developing technologies, innovations, and pioneering of products have resulted in rise in the utilization of electronic components globally. Developing a new product increases its utility and demand in the market. High competition among players has encouraged them to develop new technologies and upgrades to attract a new consumer base. These companies have increased their R&D expenditure to differentiate their products from competitors. The Internet of Things (IoT) is observed to be one such new end-use application.

Infringements and Absence of Intellectual Property Rights May Restrain the Market

The absence of proper enforcement of intellectual property rights can lead to infringements that restrain the market. In some countries, the legal framework for IPR needs to be more well-defined and strictly enforced, making it difficult for innovators and investors to protect their ideas and investments. In addition, piracy and counterfeiting are significant problems for the electronic manufacturing services market. Counterfeit components can result in product malfunctions, damaging manufacturers' reputations and harming consumers. Piracy of software or firmware can also result in security vulnerabilities and data breaches.

Intellectual property infringement lawsuits can be costly and time-consuming. They can also divert resources away from innovation and product development. As a result, some companies may be hesitant to invest in new technologies or products that may be subject to infringement claims.

Development and Adoption of EVs Will Provide Opportunities for The Market

The development and adoption of electric vehicles have created a significant demand for electronic components. Battery management systems, electric motors, and power electronics are just a few components required to produce electric vehicles. This increased demand has resulted in new opportunities for the electronic manufacturing services market to provide components and services to automakers and other companies in the supply chain.

Moreover, the development of electric vehicles has led to innovation in battery technology, charging infrastructure, and other areas. This, in turn, has created opportunities for the electronic manufacturing services market to provide research and development services, as well as the production and assembly of new technologies. As electric vehicles evolve, the electronic manufacturing services market will be critical in driving innovation and supporting their production.

Furthermore, many governments worldwide have provided incentives and subsidies for the development and adoption of electric vehicles. This government support has created a favorable environment for the electronic manufacturing services market to invest in new technologies and expand their operations. With continued government support and the growth of electric vehicles, the electronic manufacturing services market is poised for significant growth and innovation in the years to come.

Recent Developments

January 2023: FIT Hon Teng Limited acquired PRETTL SWH Group to expand its business lines and capabilities and further grow its mobility solutions. PRETTL SWH will be owned fully by FIT.

December 2022: TSMC announced its expansion of manufacturing lines in Arizona. The new setup is expected to be operational by 2024 and will manufacture N4 process technology and 3nm process technology.

October 2022: Benchmark Electronics Inc. and Yield Engineering Systems partnered with the aim of manufacturing the flagship product in Malaysia and further support Yield Engineering Systems’ advanced modular wet-process system located in Phoenix.

Segmentation Analysis

The market is further categorized into manufacturing services, engineering services, test & development, and other services based on service type. In 2022, manufacturing services dominated the segmental share due to significant progress in research and development of efficient assembly components and the essential role of circuit boards in all electronic devices. Circuit boards are integral to a wide range of electronic devices, including consumer electronics, medical devices, and aerospace components. The increasing demand for advanced and efficient circuit-board assembly components has resulted in substantial growth in the manufacturing services segment.

By application, the market is categorized into automotive, aerospace and defense, consumer electronics, healthcare, IT and telecom, and others. The IT and Telecom category dominates the market due to its continuous growth and increasing demand. This growth can be attributed to several factors, such as the rising number of businesses, technological advancements, and government policies that support the sector.

Although IT and Telecom is the leading category, consumer electronics, automotive, and healthcare segments are also expected to experience significant growth during the forecast period. The automotive industry, in particular, is expected to grow the fastest among all the categories. The rising demand for advanced vehicle technologies and the increasing adoption of electric and hybrid vehicles drive this growth. Additionally, the healthcare industry is expected to grow due to the rising demand for medical devices and equipment. In contrast, the consumer electronics industry will benefit from the growing demand for smart devices and gadgets.

Asia Pacific holds the largest share due to the presence of large-scale manufacturers

In 2022, Asia Pacific dominated the regional share accounting for more than 40% of total revenues. The presence of the world’s top EMS companies in the region is one of the key factors attributing to the largest share of Asia Pacific. Low labor costs, availability of raw materials, and favorable government policies are a few of the factors driving the market in Asia Pacific. China, Taiwan, Japan, and India are among the prominent countries aiding market growth. China leads the region with maximum revenue generation owing to a large number of manufacturing units in the country. The demand for consumer electronics, automotive, and other segments has propelled growth in China. In 2022, China accounted for more than 45% of revenues in Asia Pacific. Asia Pacific is estimated to continue its dominance through the forecast period.

North America to observe fastest potential growth following Asia Pacific

North America is amongst the significant regional markets for electronics manufacturing services owing to rapid development and constant demand for new and upgraded engineering services and other products. The availability of capital investments in the region will provide further opportunities for growth. The U.S. is the most prominent country in the region accounting for more than 50% of demand and revenues. Increasing demand from consumer electronics has driven the requirement of R&D and further investments so as to provide better and more futuristic innovative products. Additionally, companies in North America have been partnering with other companies around the world to expand their reach and provide better products and services to their consumers.

Europe to observe a steady rise in the EMS market

In 2022, Europe observed a gradual rise in the demand for the electronic manufacturing services market. The size of the market in Europe is less as compared to Asia Pacific and North America and limitations on the availability of land are a factor impeding the fast growth of the market. However, demand for EMS products is constantly on the rise resulting in steady growth through the forecast period. Key players in the region have been establishing partnerships to further improve the market structure in the region.

Competitive Landscape

• Benchmark Electronics, Inc.
• CELESTICA INC.
• COMPAL Inc.
• DIXON TECHNOLOGIES
• FLEX LTD.
• Hon Hai Precision Industry Co., Ltd.
• KEYENCE CORPORATION
• NORTHROP GRUMMAN.
• Plexus Technology Solutions, LLC
• Taiwan Semiconductor Manufacturing Company Limited

The global Electronics Manufacturing Services market is segmented as follows:

By Application

• Automotive
• Aerospace & Defense
• Consumer Electronics
• Healthcare
• IT & Telecom
• Others

By Service Type

• Manufacturing Services
• Engineering Services
• Test & Development
• Others

By Region

• North America
  • The U.S.
  • Canada
  • Mexico
• Europe
  • France
  • The UK
  • Spain
  • Germany
  • Italy
  • Nordic countries
    • Denmark
    • Finland
    • Iceland
    • Sweden
    • Norway
  • Benelux Reunion
    • Belgium
    • The Netherlands
    • Luxembourg
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • New Zealand
  • Australia
  • South Korea
  • Southeast Asia
    • Indonesia
    • Thailand
    • Malaysia
    • Singapore
    • Rest of Southeast Asia
  • Rest of Asia Pacific
• The Middle East & Africa
  • Saudi Arabia
  • UAE
  • Egypt
  • Kuwait
  • South Africa
  • Rest of the Middle East & Africa
• Latin America
  • Brazil
  • Argentina
  • Rest of Latin America