Electronic Manufacturing Services (EMS) Market Analysis by Service Type (Electronics Manufacturing, Engineering Services, Test & Development Implementation, Logistics Services, and Others); by Application (Consumer Electronics, Industrial, Medical and Instrumentation, Aerospace & Defense, IT & Telecom, Automotive, Semiconductor Manufacturing, Robotics, and Others) – Global Supply & Demand Analysis & Opportunity Outlook 2023-2035
Buy Now Report ID: 4833 | Published Date: Apr 17, 2023
The global electronic manufacturing services market size is estimated to reach ~USD 15 Billion by the end of 2035 by growing at a CAGR of ~7% over the forecast period, i.e., 2023 – 2035. In addition to this, in the year 2022, the market size of the electronic manufacturing services market was ~USD 5 Billion. The growth of the market can be attributed to the increasing manufacturing output worldwide together with the growing industrial application of EMS that provides services such as designing, testing, parts procurement, component assembling, manufacturing, re-engineering, and logistics. For instance, It was observed that global manufacturing production reached a robust 3.6% year-over-year growth rate in the third quarter of 2022.
In addition to these, factors that are believed to fuel the market growth of electronic manufacturing services include the growing digital revolution worldwide which is responsible for the surge in the demand for different sizes of printed circuit boards (PCB) in different arenas resulting in the surging number of PCB manufacturers worldwide. It is observed that the best PCB manufacturers are located in Asia with over 40% located in China itself. Moreover, the robust growth of the IT & telecom sector as well as the increasing number of internet-connected devices (IoT) besides the rising number of smart homes are augmenting the need to manufacture radiofrequency and wireless devices, optoelectronics services, and microelectronics devices, which is further anticipated to boost the market growth.
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Base Year |
2022 |
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Forecast Year |
2023-2035 |
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CAGR |
~7% |
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Base Year Market Size (2022) |
~ USD 5 Billion |
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Forecast Year Market Size (2035) |
~ USD 15 Billion |
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Regional Scope |
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Growth Drivers
Surging Demand For Electronics & Smart Devices - With the rising disposable income as well as a burgeoning pool of middle age and young population worldwide, the demand for electronics & smart devices is fueling drastically. For instance, the sale of mobile phones in 2021 across the globe totaled approximately 1740 million units, accounting for ~7800 million mobile people users, or about 20% of the world's population, buying a mobile in that particular year. Moreover, owing to the increasing demand for electronics as well as progressing shift toward horizontal business divisions electronics along with the rising need for outsourcing manufacturing services, EMS in the electronics industry is emerging as the focus of attention. This, as a result, is anticipated to boost market growth.
Expanding Automobile Industries – the rising electrification of cars and other vehicles as well as the increasing demand for electronic components by automakers is anticipated to lead the EMS market growth. Earlier, components like PCBs were majorly employed for headlight switches and windscreen wipers in automobiles, but with the increasing automation & rising incorporation of sensor technology in the automotive sector, the demand for PCBs and many other electronic part components rose to enable many high-tech features to improve safety and automation while driving. As per estimations, in the years, electronics in cars are anticipated to be responsible for ~50% of a new car's total cost.
Growing Investment in Semiconductor Foundry – the increasing sales of semiconductors as well as the shortage of supply has led to rising investment in semiconductor production, addressing the global shortage of semiconductors, which will ultimately boost the market growth. It was observed that in April 2020, semiconductors worth about USD 2.8 billion were sold in Japan, which grew to about USD 3.3 billion by the end of December that year.
Rising Production Volume of OEMs and ODMs – the increasing popularity of brand names as well as the growing trend of customized products is expanding the production base of the OEMs. For instance, the global production volume by Japanese automaker OEMs rose by ~7,391,194 in 2021.
Increasing Automation in Various End-Use Industries – it is expected that automation will raise global productivity by nearly 10% to 15% which is why most businesses as well as processes are opting for automation. This has also led to increasing demand for industrial robots. All these factors are expected to boost market growth.
Challenges
The global electronic manufacturing services market is segmented and analyzed for demand and supply by service type into electronics manufacturing, engineering services, test & development implementation, logistics services, and others. Out of the given service types of electronics manufacturing services, the electronics manufacturing segment is estimated to gain the largest market share of about ~38% in the year 2035. The growth of the segment over the forecast period can be attributed to the increasing global population base as well as the rising global GDP per capita which is responsible for the expanding demand for consumer electronics globally. The global population has become more than 8 Billion as of 2023. Moreover, it was found that in 2022, consumers spent approximately USD 500 billion on electronics worldwide.
The global electronic manufacturing services market is also segmented and analyzed for demand and supply by application into consumer electronics, industrial, medical and instrumentation, aerospace & defense, IT & telecom, automotive, semiconductor manufacturing, robotics, and others. Amongst these segments, the industrial segment is expected to garner a significant share of around ~46% in the year 2035. The radically growing industrialization as well as the rising automation of various industrial processes worldwide owing to the elevating demand for industrial products by end-use industries is anticipated to propel the segment growth.
On the other hand, the IT & telecom segment is projected to witness a massive CAGR during the forecast period, owing to the rising digitalization globally which is leading to the augmenting demand for various electronic devices, smartphones, and wearables with internet connectivity being the simplest example. This, as a result, is anticipated to create numerous opportunities for the growth of the segment in the coming years.
Our in-depth analysis of the global electronic manufacturing services market includes the following segments:
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By Service Type |
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By Application |
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The market share of electronic manufacturing services in Asia Pacific, amongst the market in all the other regions, is projected to be the largest with a share of about ~36% by the end of 2035. The growth of the market can be attributed majorly to the existence of major semiconductor foundries in the region including the Asia Pacific “Big 4” countries as well as the rising impetus to domestic manufacturers in emerging economies such as India to boost the electronics manufacturing industry. For instance, it is observed that Asia Pacific is the largest global semiconductors market, accounting for almost 60% of global semiconductor sales, with China alone accounting for more than 30%. Moreover, it was reported that India's market share in the global electronics manufacturing industry grew to 3.6% in 2020 from 1.3% in 2012. Furthermore, India is anticipating touching the target of ~USD 300 billion worth of electronics manufacturing and ~USD 120 billion in exports by FY 26.
The North American electronic manufacturing services market is estimated to be the second largest, registering a share of about ~24% by the end of 2035. The growth of the market can be attributed majorly to the growing production of mobile phones, consumer electronics, and industrial electronics in the region owing to the presence of a vast market as well as the increasing government support along with the increasing R&D spending. Moreover, the rising collaborations between market key players and major OEMs of the region are further expected to boost regional market growth over the forecast period. For instance, in February 2023, General Motors Company an American multinational automotive manufacturing company signed a long-term agreement to establish an exclusive production capacity of U.S.-produced semiconductor chips with GlobalFoundries a multinational semiconductor contract manufacturing and design company headquartered in New York.
Further, the market in Europe, amongst the market in all the other regions, is projected to hold a majority of the share by the end of 2035. The growth of the market in the region can be attributed to the growing industrialization which is exhibited by augmenting industrial output as well as increasing investment in the electrification & automation of the automotive sector backed by expanding technical expertise, resources, and competitive edge of the existing electronic manufacturing company in the region
General Electric Company an American multinational conglomerate announced that it is tripling its solar and battery energy storage Power Electronics Systems manufacturing capacity to 9 GW per annum. The systems are manufactured at GE’s newly launched Renewable Hybrids factory in Chennai, India.
SIIX Corporation a Japan-based company mainly engaged in the global provision of electronic manufacturing services announced its business alliance with Robert Bosch GmbH a German multinational engineering and technology company. This agreement is a transaction contract for manufacturing Printed Circuit Board assembly of car multimedia.
In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.
Author Credits: Abhishek Verma, Hetal Singh
Ans: The growing manufacturing output globally as well as the increasing industrial automation along with the rising digitalization are the major factors driving the market growth.
Ans: The market size of electronic manufacturing services is anticipated to attain a CAGR of ~7% over the forecast period, i.e., 2023 – 2035.
Ans: High upstart investment as well as the rising concern about the environmental impact of electronics manufacturing are estimated to be the growth hindering factors for the market expansion.
Ans: The market in the Asia Pacific region is projected to hold the largest market share by the end of 2035 and provide more business opportunities in the future.
Ans: The major players in the market are General Electric Company, SIIX Corporation, Foxconn Technology Group, Benchmark Electronics Inc., Wistron Corporation, Koninklijke Philips N.V.
Ans: The company profiles are selected based on the revenues generated from the product segment, the geographical presence of the company which determines the revenue generating capacity as well as the new products being launched into the market by the company.
Ans: The market is segmented by service type, application, and by region.
Ans: The electronics manufacturing segment is anticipated to garner the largest market size by the end of 2035 and display significant growth opportunities.
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