DUBLIN, Nov. 3, 2020 /PRNewswire/ -- The "Electronic Manufacturing Services Market - Forecasts from 2020 to 2025" report has been added to ResearchAndMarkets.com's offering.
The electronic manufacturing services market is projected to grow at a CAGR of 8.64% to reach US$650.780 billion by 2025 from US$395.818 billion in 2019
The electronic contract manufacturing and design services are the services provided by the electronics manufacturers that design, manufacture, test and provide other ancillary services related to the electronic product which is in consideration. This method of manufacturing is mainly adopted by companies to reduce their manufacturing cost and utilize the capabilities of the companies delivering this service.
Growing adoption of contract manufacturing services by SMEs to avoid huge capital investments in the production lines and take advantage of the design expertise and manufacturing capabilities of the service providers. The majority of the businesses across the globe are small and medium enterprises, specifically in developing countries. According to the World Bank, they represent about 90% of businesses and more than 50% of employment worldwide. Governments are making SMEs a high priority as it is expected that 600 million jobs will be required by 2030 to absorb the rising workforce and SMEs are a great contributor to employment generation.
However, getting access to finance is a major bottleneck faced by SMEs. They are less likely to obtain loans from the formal sector, and they have to mainly rely on internal funds to sustain their operations. The International Finance Corporation (IFC) estimated that 65 million firms, or about 40% of formal micro, small and medium enterprises (MSMEs) in developing countries have unfulfilled finance needs. East Asia and the Pacific region share the largest share of this gap (Source: World Bank). This requires these firms to get their non-core operations outsourced by experts at a lower cost. Manufacturing is one of them. As the number of SMEs developing electronic products is rising, the reliance on electronic contract manufacturing services and design services is also on a constant rise.
The growing demand for electronic products by industries and consumers is fuelling the sales of this market. With the easy and cheap availability of consumer electronics, people have become highly dependent upon electronic items as they have made lives more livable. A plethora of consumer electronics with hi-tech designs are kept on the shelves in the market. This gives consumers a chance to choose the best fit for them. People have become cost- and quality- conscious while making a purchase decision about electronics as they are often considered a capital expenditure, even if small. Due to rising incomes and an inclination towards a culture of social status, the demand for electronic items is anticipated to rise throughout the forecast period. This will have a direct impact on the market for contract manufacturing.
Increasing competition among equipment sellers is turning them towards adopting measures to lower their costs of production and supply chain management. Along with an increase in the count of buyers, the supply side is also facing a rising curve. With the advent of start-up culture, there is an increase in the manufacturing facilities too. This is creating a cutthroat competition among the already existing suppliers and the new entrants in the market with regard to the price and quality of products. The companies are trying to cut their cost to the minimal and make their product more attractive for the buyers. This is raising the demand for contract manufacturing services by such market players.
Technological improvements in the manufacturing process and rapid obsolescence of the electronic products is also a major driver for this market. The obsolescence of machinery and products has become a matter of a few years. This results in the need for upgrading the machinery and also the technical features of the products. Huge capital investments in CAPEX and research and development are needed to supplement this step. To avoid such capital losses, contract manufacturers are resorted to as they have the advantage of leveraging economies of scale with large production facilities. Also, replacing the older machines is also cheaper for them due to the presence of the bulk of them. This is a major demand driver for this market. Furthermore, the manufacturing of highly-equipped medical devices require advanced technology and strict regulatory compliance. This is also contributing to the development of this market in the medical sector.
However, the quality of the product and privacy of the product's design become vulnerable in contract manufacturing. As a matter of fact, there is always a susceptibility of breach of the product design when production is outsourced. This may slightly affect the growth of this market due to the fear of losing out. Nevertheless, with stringent rules and proper paperwork, this vulnerability can be reduced. Additionally, in some cases, outsourcing the assembly processes can be more time-consuming and cumbersome than in-house production.
Major Market Developments
- In July 2019, Plexus announced the completion of the renovation of its facility in Livingston, Scotland. This renovation completes Plexus' multi-year investment to expand and upgrade all eight of its global engineering facilities
- In March 2018, Taiwanese giant Foxconn, the company that manufactures the iPhone for Apple, bought accessory maker Belkin, as well as associated brands Wemo, Linksys and Phyn
The Asia Pacific region is expected to witness a high CAGR in the electronic manufacturing services market due to the increasing demand for digital and electronic devices in this region.
Also, the presence of major players in India and China is expected to fuel the growth of this market in this region. Rapid urbanization in conjunction with a rising per-capita income of people in Asia is driving people towards purchasing more of electronic products. The American region is anticipated to hold a major share of this market owing to the technological advancements happening in that region. Additionally, the European region is also projected to expand throughout the forecast period with a lot of product launches.
Key Topics Covered:
1. Introduction
1.1. Market Definition
1.2. Market Segmentation
2. Research Methodology
2.1. Research Data
2.2. Assumptions
3. Executive Summary
3.1. Research Highlights
4. Market Dynamics
4.1. Market Drivers
4.2. Market Restraints
4.3. Porters Five Forces Analysis
4.3.1. Bargaining Power of Suppliers
4.3.2. Bargaining Power of Buyers
4.3.3. Threat of New Entrants
4.3.4. Threat of Substitutes
4.3.5. Competitive Rivalry in the Industry
4.4. Industry Value Chain Analysis
5. Electronic Manufacturing Services Market Analysis, by Service
5.1. Introduction
5.2. Design & Engineering
5.3. Manufacturing
5.4. Assembly
5.5. Others
6. Electronic Manufacturing Services Market Analysis, by End-user
6.1. Introduction
6.2. Telecom & IT
6.3. Consumer Electronics
6.4. Automotive
6.5. Aerospace & Defence
6.6. Healthcare
6.7. Others
7. Electronic Manufacturing Services Market Analysis, by Geography
7.1. Introduction
7.2. North America
7.2.1. North America Electronic Manufacturing Services Market, By Service, 2019 to 2025
7.2.2. North America Electronic Manufacturing Services Market, By End-user, 2019 to 2025
7.2.3. By Country
7.2.3.1. United States
7.2.3.2. Canada
7.2.3.3. Mexico
7.3. South America
7.3.1. South America Electronic Manufacturing Services Market, By Service, 2019 to 2025
7.3.2. South America Electronic Manufacturing Services Market, By End-user, 2019 to 2025
7.3.3. By Country
7.3.3.1. Brazil
7.3.3.2. Argentina
7.3.3.3. Others
7.4. Europe
7.4.1. Europe Electronic Manufacturing Services Market, By Service, 2019 to 2025
7.4.2. Europe Electronic Manufacturing Services Market, By End-user, 2019 to 2025
7.4.3. By Country
7.4.3.1. UK
7.4.3.2. Germany
7.4.3.3. France
7.4.3.4. Spain
7.4.3.5. Others
7.5. The Middle East and Africa
7.5.1. Middle East and Africa Electronic Manufacturing Services Market, By Service, 2019 to 2025
7.5.2. Middle East and Africa Electronic Manufacturing Services Market, By End-user, 2019 to 2025
7.5.3. By Country
7.5.3.1. Saudi Arabia
7.5.3.2. United Arab Emirates
7.5.3.3. Israel
7.5.3.4. Others
7.6. Asia Pacific
7.6.1. Asia Pacific Electronic Manufacturing Services Market, By Service, 2019 to 2025
7.6.2. Asia Pacific Electronic Manufacturing Services Market, By End-user, 2019 to 2025
7.6.3. By Country
7.6.3.1. Japan
7.6.3.2. China
7.6.3.3. India
7.6.3.4. Others
8. Competitive Environment and Analysis
8.1. Major Players and Strategy Analysis
8.2. Emerging Players and Market Lucrativeness
8.3. Mergers, Acquisitions, Agreements, and Collaborations
8.4. Vendor Competitiveness Matrix
9. Company Profiles
9.1. Benchmark Electronics
9.2. Flex Ltd.
9.3. Plexus Corp
9.4. Jabil Inc.
9.5. Celestica Inc.
9.6. Compal Electronics, Inc.
9.7. Creation Technologies LP
9.8. Foxconn Technology Group
9.9. Sanmina Corporation
9.10. Beyonics
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