Electronic Manufacturing Services (EMS) Market Trends

Growth Drivers

• Rising adoption of consumer electronics: The rising popularity of consumer electronics such as smartphones, tablets, and wearable devices is resulting in a surge in demand for EMS. This demand is largely driven by the need for high-speed production and cost-effective manufacturing to meet ever-evolving consumer expectations. As the market for personal electronics becomes more competitive and innovation cycles shorten, consumer electronics brands increasingly rely on EMS providers to deliver rapid prototyping, scalable production, and integrated supply chain support. This outsourcing model allows OEMs to focus on design and branding while EMS companies handle complex assembly and logistics requirements, thereby accelerating product launches and improving EMS market responsiveness.
   
• Advancements in industrial automation: The rapid advancements in industrial automation are resulting in an increased reliance on sophisticated electronic components, driving demand for EMS. As per the 2024 report of the International Federation of Robotics, in 2024, there were nearly 4 million robots operating in factories around the globe. The annual installations were also increased by half a million units, with Asia Pacific recording 70% of all newly deployed robots. This milestone underscores that industries are significantly integrating automation and control systems to enhance efficiency and productivity, necessitating complex electronic assemblies.
  
  The EMS providers are expanding their capabilities through strategic acquisitions and partnerships. In April 2023, Emerson Electric acquired National Instruments in a USD 8.2 billion all-cash deal, aiming to enhance its automation technology offerings with advanced testing and measurement solutions. This acquisition positions Emerson to better serve the evolving requirements of industrial automation clients. Such developments highlight the critical role EMS companies play in supporting the global shift towards automated industrial processes.

Challenges

• Component shortages and supply chain disruptions: Component shortages and persistent supply chain disruptions have emerged as critical challenges for the electronic manufacturing services (EMS) market. The global shortage of semiconductors and key components such as microcontrollers and integrated circuits is impacting production timelines, leading to delays, order backlogs, and cost inflation. EMS providers are struggling to meet client demands, especially in high-growth sectors like automotive and consumer electronics. Logistics constraints, such as port congestion, container shortages, and geopolitical transport issues, further compound the problem.