Electronics Manufacturing Services Market Size (2024 - 2029)

Electronics Manufacturing Services Market Analysis

The Electronics Manufacturing Services Market size is estimated at USD 580.52 billion in 2024, and is expected to reach USD 773.22 billion by 2029, growing at a CAGR of 5.90% during the forecast period (2024-2029).

• With increasing miniaturization and adoption of emerging technologies in the Industrial Internet of Things (IIoT) and enhanced communication posed by 5G, electronic component design and assembly have been revolutionized. For instance, the communication base stations for 5G developed a superior antenna technology, such as MIMO, leading to a rise in the number and performance of radiating elements.
• Additionally, the demand for electronic devices, such as smartphones, smartwatches, and other devices, has boosted the market's growth. According to IBEF, the Indian appliances and consumer electronics industry is anticipated to more than double, reaching USD 21.18 billion by 2025. Further, many companies seek to lower their inventory, facilities, and equipment in their manufacturing activities, shifting the focus of their capital investments toward sales, marketing, and R&D. This has increased the demand for outsourcing to third-party manufacturing service providers.
• For instance, an avionics company decided to transfer its PCBA production to an EMS partner to broaden its product and service offerings and not make an additional investment in manufacturing. The primary requirements were compliance with AS9100 standards and multiple BGAs on the PCBAs, with up to 16 layers on some PCBs.
• Government initiatives across various regions are propelling market growth. For example, as reported by IBEF, the Indian government greenlit 14 companies for the IT hardware production-linked incentive (PLI) scheme. Additionally, the Indian government sanctioned 100% FDI in electronics design and manufacturing, and it is considering raising the FDI cap for multi-brand retail to 51%, up from the current 49%. These moves are poised to significantly boost market growth.
• Globally, SMEs and MSMEs are increasingly turning to third-party manufacturing services. This shift allows them to sidestep hefty capital investments in production lines and tap into the design and manufacturing expertise of service providers. According to the International Finance Corporation (IFC), an estimated 65 million firms, roughly 40% of formal micro, small, and medium enterprises in developing nations, face unmet financial needs. Given that the majority of businesses worldwide, especially in developing nations, fall under the SME category, their reliance on manufacturing service providers is set to underpin the EMS market's growth.
• The COVID-19 pandemic significantly affected numerous end-user industries, and electronics manufacturing was no exception. A survey by IPC highlighted that consumer electronics were impacted, given their heavy dependence on China's manufacturing capacity and supply chains. Despite this, many electronics manufacturers and associated services were deemed essential, given their pivotal role in tasks ranging from product assembly to designing circuit boards for vital medical equipment. In the post-COVID era, electronics manufacturing is poised to remain a cornerstone of both the economy and the healthcare sector.

Electronics Manufacturing Services Industry Segmentation

Electronics manufacturing services are used by organizations that design, manufacture, test, distribute, and provide return and repair services for electronic components and assemblies for original equipment manufacturers (OEMs).

The electronics manufacturing services market is segmented by service type (electronics design and engineering, electronics assembly, and electronics manufacturing), application (consumer electronics, automotive, industrial, aerospace and defense, healthcare, IT, and telecom), and geography (North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa). The market sizes and forecasts are provided in terms of value (USD) for all the above segments.