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The global electronic contract manufacturing and design services market size is expected to reach $658.0 billion by 2025, according to a new study by Grand View Research, Inc., registering a CAGR of 7.9% over the forecast period. The electronics industry is highly competitive in nature owing to increasing complexity of electronic products and rising pressure on OEMs for reducing costs. Moreover, decreased product lifecycles have upped demand for better manufacturing capabilities and related services. To achieve the same, OEMs are seeking support from contract manufacturers, in turn, driving the market over the forecast period.
OEMs subcontract with electronics manufacturing service (EMS) companies and benefit from their expertise in design, manufacturing, and supply chain management. Furthermore, reduced initial investments and increased operational efficiencies allow OEMs to focus on their core competencies.
This has led to surging demand for electronic contract manufacturing and design services by OEMs. Moreover, establishment of in-house manufacturing units is a key challenge faced by majority of OEMs.
Thus outsourcing is a preferred option to keep pace with increasing competition.
The market is projected to witness significant growth due to rising demand from end-use industries, including healthcare, aerospace and defense, IT and Telecom, and automotive. The healthcare industry is expected to witness substantial growth owing to increasing demand for medical devices.
Surging need for optimizing resources and technological developments in manufacturing facilities have led to increased adoption of EMS among end-use industries.
Further key findings from the study suggest:
• The electronic contract manufacturing and design services market is expected to exhibit a CAGR of 7.9% from 2019 to 2025 owing to rising need for resource optimization and growing developments in manufacturing technology
• On the basis of service, the electronic manufacturing segment accounted for the largest market share in 2018. However, electronic design and engineering services are projected to witness high growth over the forecast period owing to surging inclination of OEMs toward outsourcing of manufacturing and designing services
• On the basis of end use, the IT and telecom sector held the dominant revenue share in 2018. However, non-technical sectors such as healthcare, automotive, and aerospace and defense are expected to witness noteworthy growth over the forecast period owing to rising outsourcing trends in these industries
• Asia Pacific accounted for over 40% share of the overall revenue in 2018 and is expected to dominate the market over the forecast period owing to high availability of raw materials and low-cost labor in the region
• Hon Hai Precision Industry Co., Ltd.; Flextronics International, Ltd.; Jabil Circuit, Inc.; Sanmina Corporation; and Benchmark Electronics, Inc. are some of the key market players that captured a significant share in 2018.
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