Electronic Manufacturing Services (EMS) provides design and engineering, assembly, manufacturing and testing services for electronic components and printed circuit board (PCB) components. For OEMs, EMS simplifies the investment in automatic assembly equipment.
Electronic manufacturing services generally include PCB assembly services, system assembly services, design and build services. Printed circuit board assembly is one of the most important steps in PCB manufacturing and involves all the components needed to produce a complete PCB. There are two ways to build printed circuit board components, namely Surface mount technology (SMT) and through-hole technology (THT). System assembly services include cable assembly, electromechanical assembly, and the electronic system assembly services required by service providers to provide various electronic products. Design and build services refer to the service provider providing product design and build services to the customer: from the initial concept to the product design to the complete presentation of the new product for the customer.
EMS applications mainly include computer, consumer electronics, aerospace & defense, medical & healthcare, automotive, and communications. Computer manufacturing services include the manufacture and assembly of notebook computers, desktop computer systems, servers and storage devices. Consumer electronics refers to the electronic products used in daily consumption life. It belongs to a specific household appliance or portable appliance with electronic components, usually used for entertainment, communications, and office purposes, such as television, telephone, stereo, DVD player, etc. Aerospace & defense products are extremely complex, which must operate in extreme environments to meet stringent safety and reliability standards, with extremely long life cycles. Therefore, the requirements for EMS will be higher. Different from other consumer electronic products, medical electronic products are required to meet very strict quality standards. All aspects of product production have very high requirements for EMS manufacturers\' qualifications and product quality. EMS manufacturing expertise in the automotive industry includes PCB assembly services, box assembly and module assembly, providing OEMs with a large number of manufacturing facilities. The communications technology industry covers the following areas: personal communications, home communications, and communications networks. Products include mobile phones and components, set-top boxes and flat-screen televisions, base stations, tower amplifiers and microwave systems.
EMS Industry Regional Distribution and Key Drivers
The Asia-Pacific is the EMS industry\'s largest revenue market, with a market share of 71.67% in 2015 and 72.48% in 2020, an increase of 0.81%. In 2019, North America ranked second with 12.15 percent of the market.
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EMS companies are mainly from the Asia-Pacific with moderate industry concentration rates. The top three are Hon Hai Precision Industry Co., Ltd, Jabil Circuit, Inc and Kinpo, with the revenue market share of 29.04%, 8.90% and 7.82%, respectively in 2019.
Due to the strict regulatory environment for device manufacturing and the market demand for highly advanced manufacturing technologies, the increasing availability of the latest and greatest medical devices is expected to significantly boost the growth of the electronic manufacturing services market. Industry players investing more in research and development to reduce costs and gain a competitive advantage over other competitors is one of the key factors promoting the adoption of electronic manufacturing services in the market, which is conducive to expanding the growth of the overall market.
Smart home devices are becoming increasingly popular among residential consumers. IoT connects products, software algorithms, services and end users, enabling the smooth flow of data and real-time decision-making, increasing usage efficiency. Several large, medium and small companies around the world are making major investments in the IoT industry. With most enterprises shifting to the IoT market, IoT is expected to enter a multitude of applications such as lighting, HVAC, security, healthcare and entertainment. The growing consumer preference for video doorbells, voice assistance technology and surveillance systems, is expected to significantly drive the growth of the smart home market, thereby increasing the manufacturing demand for related electronic devices.
New energy vehicles comply with the requirements of "carbon neutral, carbon peak ", so the market demand for cars is only increasing. The surge in demand is expected to boost the production of electric and hybrid vehicles, which will spur growth in electric components. In addition, the government is expected to formulate preferential policies to promote electric vehicles throughout the forecast period and beyond to expand demand for these services from major electric vehicle manufacturers.
EMS Market Trend: Steady Growth at A CAGR of 5.29%
According to our research, the global EMS market totaled $164,471 million in sales in 2015 and will grow to $200,694 million by 2020. We forecast that the EMS market will be worth $297,698 million by 2026. The compound annual growth rate of EMS from 2019 to 2026 is 5.29%.
In the future, with the growing market demand for various electronic products, EMS enterprises will seize the development opportunity, further improve the manufacturing service capacity, expand business areas, and enrich the customer structure. In the process of development, orders of different brands have the characteristics of large quantity, variety and different specifications, which requires EMS companies to have a high scale production capacity. In the face of the complex situation of numerous production lines, complex raw material categories, large order quantity and diversified customer needs, EMS enterprises must establish a standardized production management system and standardized operation to achieve the goals of large-scale production, low cost, high quality and high efficiency. The process, clear inspection standards and visual supervision mechanism can effectively manage the mass production process. Secondly, to maintain the ability of technological innovation, with the continuous acceleration of the upgrade of electronic products, EMS enterprises must keep up with the development trend of process technology, to meet the demand for electronic products for supporting the supply chain.
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