Market Trends of Europe Electronic Manufacturing Services Industry
Electronics Design and Engineering Service Type is Expected to Hold Significant Market Share
- Electronic design tools, including computer-aided engineering, IC physical design, and verification, have ushered in a smarter design era. By reducing design time and errors, these tools have garnered significant popularity. The adoption of electronic design automation (EDA) tools has steadily risen, especially in sectors like automotive and aerospace. However, a notable drawback of EDA tools is their limited ability to draw insights from past designs.
- Given the rising demand for large volumes of complex chips, particularly for consumer electronics, electronics design firms increasingly turn to machine learning in their EDA toolsets. Machine learning offers profound insights into the semiconductor industry through modeling and simulation and promises heightened accuracy and efficiency, nudging engineers toward greater automation. As electronic device manufacturers witness the benefits of EDA tools enhanced by machine learning, they swiftly embrace these advanced solutions. This shift fosters innovation in designs and chips and fuels the widespread adoption of EDA tools.
- Further, AI-driven design automation tools autonomously create circuit designs, PCB layouts, and system architectures, adhering to set requirements and constraints. They outpace manual methods, swiftly navigating a broader design spectrum, leading to the discovery of novel topologies and architectures. Cutting-edge techniques, including generative adversarial networks (GANs) and reinforcement learning, are harnessed to birth fresh design concepts. In addition, Europe is widely adopting AI technologies for several industries, which can be a boon for market growth. According to Eurostat, in 2023, Denmark, in Europe, had 15.2% of AI adoption, the highest across the region.
- Initiatives taken by European governments to strengthen semiconductor manufacturing are also favoring the market's growth in the region. For instance, in 2023, the European Union (EU) approved a EUR 43 billion (~USD 47.5 billion) plan called the Chips Act to develop semiconductor fabs and support Europe's overall semiconductor production ecosystem.
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Germany is Expected To Hold Significant Market Share
- The manufacturing sector is integral to Germany's economic growth, owing to critical industries like automotive, chemicals, engineering, consumer durables, and pharmaceuticals. In Q4 2023, Germany's manufacturing sector reported a GDP of EUR 193.736 trillion (USD 214.719 trillion) , reflecting a significant increase from EUR 183.697 trillion (USD 203.593 trillion) in Q4 2022, according to the Federal Statistical Office. This reflects that the country is steadily moving toward automation and process-driven manufacturing, which are projected to improve efficiency and enhance productivity.
- The country has one of the prominent sectors with many automation manufacturing facilities: the automobile industry. To maintain accuracy and efficiency, it was observed that the manufacturing facilities of various car manufacturers were automated. In addition, the demand in the automobile industry is expected to grow due to an increasing trend toward replacing traditional vehicles with EVs. For instance, according to KBA, Germany has witnessed a substantial surge in registering new electric cars. In 2023, the country registered a notable 524,219 new electric vehicles. As modern EVs contain more electronic units, such trends create a favorable ecosystem for the market's growth in the region.
- The shift in the automotive industry's electrification trend extends beyond the engines, permeating the vehicles with features like automated electric windows, power steering, and ADAS. These advancements have propelled the automotive industry to the forefront, making it a key driver of demand in the electronics manufacturing services market.
- Germany also boasts a substantial reservoir of skilled engineers, technicians, and manufacturing personnel, providing EMS providers with a rich talent pool. Ongoing training and upskilling initiatives help employees stay abreast of evolving technologies and cultivate an innovative ethos. This technical prowess is instrumental in offering cutting-edge design, prototyping, and manufacturing services.
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