Electronics Manufacturing Services Market Size & Share Analysis - Growth Trends and Forecast (2027 - 2032)

Market Trends and Insights

OEMs Outsourcing to Focus on Core Competencies

OEM demand for specialist assembly creates recurring opportunities as customers and production programs change. Kimball Electronics said OEMs continue to subcontract assembly to companies with a core competency in the area. It identified the trend as a growth factor for its electronics manufacturing and contract development and manufacturing industries. It also said new customer relationships and programs frequently begin as expiring programs are replaced. New customer assignments must replace expiring programs before they can enlarge a supplier's recurring assembly base, making program renewal central to converting outsourcing activity into sustained revenue.

Accelerated Near-/Re-shoring of Supply Chains to Mexico, Eastern Europe and ASEAN

Regional manufacturing becomes more useful to OEMs when additional space also enables a broader production engagement. On February 10, 2025, Federal Electronics reported expanding its Hermosillo, Sonora, Mexico facility from 30,000 square feet to more than 80,000 square feet.^[1] The EMS provider said it expanded the site to support growing customer demand and further increase vertical integration in the region. The Hermosillo expansion adds vertical integration at one site, so an OEM can concentrate more of its Mexican assembly with one supplier.

Surge in EV Power-Electronics Requiring Advanced PCB Assembly Capabilities

Growing electric-drive production expands the downstream workload associated with vehicle power electronics. Volkswagen Group Components increased electric-drive production at its Kassel plant by around 24% in 2025, to more than 850,000 units. The plant is part of Volkswagen's own component production network. An EMS provider could gain assembly work where a vehicle buyer assigns power-electronics production to an external contractor. That assignment would make the buyer's allocation of production responsibility important alongside the contractor's board-assembly capabilities. Independent manufacturers can earn service revenue from this downstream expansion only by winning an outsourced assignment within the vehicle program.

Proliferation of IIoT Edge Devices Driving HDI and Advanced Packaging EMS Demand

Industrial edge applications present a hardware opportunity when compact board designs require dense routing. In January 2026, Audi reported that about 100 industrial robots worked through its Edge Cloud 4 Production platform in production at Neckarsulm, Germany. The platform coordinated industrial devices with millisecond precision. Siemens explains that HDI permits denser routing in smaller board footprints and through fine-pitch, high-component-density areas. An EMS supplier capable of implementing that routing can compete for a compact board build, making design density relevant to the production work it can accept.

Rising Semiconductor and Passive Component Cost Volatility

Component availability can constrain an EMS provider's delivery commitment even when customers are ready to place production work. Kimball Electronics said EMS firms experienced shortages, allocations and shipping delays, particularly for semiconductors, in recent fiscal years, and further disruptions could raise component costs and interrupt operations. In July 2026, Plexus CFO David Abuhl said its supply chain was tightening, with tight spots in some components. Abuhl said Plexus was coordinating component forecasts with customers and acting to get ahead of selected components. A production commitment can remain unfilled when selected components are unavailable, leaving the EMS provider exposed to delivery delays and additional component costs.

IP Protection Concerns Limiting Outsourcing in EU Aerospace and Defense

Sensitive defense designs create an outsourcing constraint. In 2025, IPC and DECISION identified disclosure of sensitive designs to foreign entities during outsourced EU defense electronics production as a technology-leakage and security-vulnerability risk, especially for strategic PCBs with valuable IP. A technically capable supplier can face a smaller scope of outsourceable work when producing the board requires disclosure of its sensitive design. Defense buyers therefore have to weigh design exposure before moving a strategic PCB to a foreign manufacturer.

*Our forecasts treat driver/restraint impacts as directional, not additive. The impact forecasts reflect baseline growth, mix effects, and variable interactions.

Electronics Manufacturing Services Market Segment Analysis

Electronic manufacturing services accounted for a 71.98% share of the electronics manufacturing services market size in 2026, making it the largest segment. Flex, a manufacturing partner also providing supply-chain solutions, products, technology, and lifecycle services, reported company-wide fiscal 2026 net sales of USD 27.9 billion, up 8% from fiscal 2025. OEMs can approach a manufacturing business at this scale for production work within an organization offering several related capabilities. Manufacturing can anchor a customer relationship that continues into product support, connecting the core production contract with the additional lifecycle services offered by the provider.

Test and development implementation is the fastest-growing segment, with a projected CAGR of 7.3% from 2027 to 2032. Creation Technologies held the ribbon-cutting for its 40% expansion of the Denver Product Realization Center on May 12, 2025, bringing the facility's footprint to 45,000 square feet. The expanded space supports engineering services, test development, and manufacturing, with a focus on quick-turn prototypes and small-batch production. Co-locating these tasks can connect the development of a test approach with the manufacturing work it must support. Because test development and small-batch production share one Denver site, a customer can move a quick-turn prototype into production without changing facilities.

Contract manufacturing (CM) represented a 62.32% electronics manufacturing services market share in 2026, making it the largest segment. Flex announced an expanded Cerebras Systems manufacturing partnership in July 2026, with new Milpitas, California, lines expected to increase CS-3 production capacity by approximately 7x through 2026.^[2] The announced expansion combined production lines, floor space, advanced test infrastructure, and skilled manufacturing talent. Flex's expansion concentrates added lines, test infrastructure, and manufacturing talent on the CS-3, tying the contractor's new capacity to this customer's AI system.

Hybrid, turnkey, and other business models form the fastest-growing segment, with a projected CAGR of 7.4% from 2027 to 2032. In fiscal 2025, Jabil said it procured components and other materials for its turnkey manufacturing services. This puts input procurement and production execution within the provider's commercial responsibility for the engagement. For an OEM, assigning both tasks to its manufacturing counterparty offers a way to organize the materials and production work together. Procurement can broaden Jabil's delivery responsibility without adding the full component value to revenue when customer-directed components receive net accounting because it does not obtain control before transfer.

Surface mount technology (SMT) was the largest segment, accounting for 54.39% of market revenue in 2026. Kitron's 2025 annual report described more than 35 SMT lines within its facilities. In January 2026, Kitron reported that its Suzhou engineers had built an automated PCB-labeling line for high-mix, low-volume production. Certain products required paper labels under customer or regulatory rules, and because labeling systems designed for high volumes did not fit the operation, Kitron built separate in-house automation.

Advanced packaging and hybrid processes are the fastest-growing segment, with a projected CAGR of 7.6% from 2027 to 2032. On March 3, 2025, Jabil and Enosemi announced photonics-packaging development for AI-compute interconnects, with Jabil providing packaging services and AMD subsequently announcing Enosemi's acquisition in May 2025. In adjacent semiconductor packaging, Amkor reported in September 2026 that customer commitments had surpassed its Arizona campus's planned phase 1 cleanroom capacity. Its proposed phase 2 would add 60,000 square meters, with construction anticipated in late 2027 and completion expected by the end of 2029. Jabil's role connects the EMS opportunity to interconnect development, while Amkor's expansion addresses a separate set of packaging-capacity commitments.

Consumer electronics was the largest segment, accounting for 38.74% of market revenue in 2026. Dixon Technologies reported annual LED TV production capacity of 6 million units in India in FY2024-25. For the quarter ended September 2025, the company said original design manufacturing reached up to 65% of its LED TV volumes. This design-led production mix can allow TV brands to draw on manufacturing capacity and product-design participation within a single supplier relationship. Design participation extends the commercial role available to a TV manufacturer into the branded product's development, widening the work represented by a consumer-device production contract.

Automotive is the fastest-growing segment, with a projected CAGR of 8.8% from 2027 to 2032. Flex opened a 10,000-square-meter automated automotive factory in Zalaegerszeg, Hungary, in November 2025 to make high-voltage components for electric and hybrid vehicles. Kimball Electronics reported fiscal 2026 automotive net sales of USD 656.9 million, down 7% from fiscal 2025 on a comparison recast to move commercial transportation into industrial. Securing new component programs can add automotive manufacturing work even when a contractor's existing sales are declining.

Geography Analysis

Asia-Pacific Electronics Manufacturing Services Market

Asia-Pacific accounted for 56.67% of the electronics manufacturing services market size in 2026 and is the fastest-growing region, with a projected CAGR of 7.2% from 2027 to 2032. India's electronics goods production value increased 15.8% in FY 2025-26 from FY 2024-25, according to the Press Information Bureau. Jabil's Ranjangaon, Pune, facility was inaugurated on June 17, 2026, with capabilities for AI data-center systems, 5G, high-end networking, industrial power-system electronics, and consumer electronics. Taiwan's supplier base includes Kentec's Taoyuan EMS facility, which began operations in 2025 with R&D, smart manufacturing, testing, and logistics as a Kenmec Group hub. India's output growth and Jabil's Pune plant show expanding manufacturing capacity in the region, while Kentec's Taoyuan hub connects R&D and testing with production at one supplier.

North America and Europe present different program opportunities because planned infrastructure manufacturing and existing automotive exposure imply different capacity decisions. In June 2025, Jabil announced plans for a Rowan County, North Carolina, facility for cloud and AI data-center customers, with approximately USD 500 million in investment and 1,181 expected jobs. The Global Electronics Association's 2025 survey covered 397 companies representing nearly 31% of European EMS production.^[3] Surveyed European EMS companies reported a 2.9% revenue decline, with the steepest drops in automotive-focused countries and greater resilience in the Baltics, Poland, the Balkans, and the Nordics. Jabil's planned Rowan County site ties North American capacity to AI data-center customers, while Europe's steepest 2025 revenue declines came in automotive-focused countries such as Austria, France, and Germany.

South America offers established local production operations through which electronics manufacturers can serve specific product programs. In September 2025, Jundiaí's city government reported that Foxconn's 2 local plants made notebooks and electronic boards and were the sole producer of Apple devices in Brazil. Within the Middle East and Africa, Cicor completed its acquisition of Valtronic's Berrechid, Morocco site on November 14, 2025, bringing medical and diagnostic device manufacturing into its Electronic Manufacturing Services Division. Foxconn's Jundiaí plants anchor notebook and electronic-board assembly in Brazil, while Cicor's Berrechid purchase gave its EMS division medical and diagnostic device production capacity in Morocco.

Regulatory Framework and Outlook

Selected jurisdictions are compared from the perspective of an EMS provider assuming compliance responsibility for finished electronic products covered by the relevant regime. Access conditions involve component-supplier eligibility, energy performance, and hazardous-substance controls. China's measures cover electrical and electronic equipment operating at no more than 1,500 V DC or 1,000 V AC, excluding equipment involved in generating, transmitting, or distributing electricity. The commercial burden depends on the product and the manufacturer's or importer's role, making the scope of each requirement important to the production engagement.

The United States is rated Medium because the FCC restriction targets defined equipment and component risks, while July 2026 proposals for hardware/software bills of materials and component-origin disclosures support Hardening. The United Kingdom's Medium rating reflects Great Britain's energy-performance condition, with Hardening based on the October 2026 proposal for a lower 0.3 W off-mode limit and consultation closing December 24, 2026. China's Medium rating reflects multi-agency substance-control and labeling duties, while Hardening follows the May 2026 addition of 23 RoHS catalog categories. Mandatory GB 26572-2025 takes effect August 1, 2027, making 10-substance limits compulsory for catalog-listed products and setting marking and disclosure duties for products outside the catalog.

Value Chain Stages

The value chain compares design, component sourcing, and manufacturing by participant role, supplier revenue, and the constraint each stage must manage. In its fiscal 2026 filing, Flex described more than 100 locations across about 30 countries on 4 continents. The company provides design and engineering, supply-chain, manufacturing, value-added fulfillment and forward logistics, and aftermarket services. For an OEM, the commercial distinction is whether an engagement pays for production execution alone or also includes earlier engineering and sourcing work.

In fiscal 2026, Flex's manufacturing operations and systems assembly generated the majority of its revenue. For an integrated provider, early engineering work can position it for downstream manufacturing revenue while increasing the responsibilities it must execute. Flex earns most of its revenue from manufacturing, so design and sourcing can feed production programs that carry the larger revenue opportunity.

Key Opportunities for Market Participants

These opportunities compare United States consumer-device assembly with Indian AI-infrastructure manufacturing, focusing on specific production work and the readiness needed to serve it. OpenAI issued its United States hardware-manufacturing RFP in January 2026, with initial proposals due in June 2026, vendor selection scheduled for March 2027, and joint planning scheduled for April 2027. The solicitation requires rapid site readiness and evidence addressing quality, traceability and manufacturing execution systems, secure handling, and cybersecurity.

On October 13, 2026, Adani Enterprises Limited and Jabil signed a non-binding memorandum of understanding for a proposed 50:50 Indian manufacturing joint venture, subject to definitive agreements, applicable approvals, and customary conditions. The proposed venture would manufacture AI racks, servers, storage, and networking equipment for domestic and export customers. Its conditional structure makes platform formation a separate commercial step from obtaining a customer manufacturing engagement. The clearest opening is production work for manufacturers able to demonstrate operating readiness, while the proposed Indian platform offers a more conditional route to future programs.