Electronic Contract Manufacturing & Design Services Market Worth $788.9 Billion By 2027
The global electronic contract manufacturing and design services market size is expected to reach USD 788.9 billion by 2027, registering a CAGR of 8.5% over the forecast period, according to a new study by Grand View Research, Inc. The electronics industry is highly competitive in nature owing to the increasing complexity of electronic products and rising pressure on OEMs for reducing costs. Moreover, decreased product lifecycles have upped the demand for better contract manufacturing capabilities and related services. To achieve the same, OEMs are seeking support from contract manufacturers, which in turn, is 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, the 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 the 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.
Asia Pacific dominated the market in 2019 and is anticipated to account for largest market share over the forecast period. This is attributed to availability of low-cost labor and raw materials in the region. China accounted for more than 33% share in 2019 in the region. In North America, the growth of the market is attributed to increasing number of medical institutes and R&D centers working on advanced diagnostic products.
Further key findings from the report suggest:
- The market is expected to witness a healthy growth owing to rising need for resource optimization and growing developments in manufacturing technology
- Electronics manufacturing segment accounted for the largest market share in 2019. However, electronics design and engineering services segment is projected to witness highest growth rate over the forecast period owing to surging inclination of OEMs towards outsourcing of contract manufacturing and designing services
- On the basis of end-use, the IT and telecom sector held the dominant revenue share in 2019. 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 45% share of the overall revenue in 2019 and is expected to dominate the electronic contract manufacturing and design services 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 2019.