The global Electronic Contract Manufacturing Services market size is anticipated to reach USD 554.8 billion by 2027 and growing at a CAGR of 5.6% over the analysis period 2020-2027. With the rising competition in the electronics industry, increasing cost reduction pressure on OEMs, complexity of electronic products, and decreased product lifecycles, the demand Electronic Contract Manufacturing Services market has boosted globally.
The global electronic contract manufacturing services market is expected to boost and grow at a significant pace across non-technical segments including, aerospace & defense, medical, and automotive. This growth is attributed to the high growth opportunities and low penetration rates in these sectors, over the coming few years. The growing need for resource optimization is one of the key factor propelling the electronic Contract Manufacturing Services market growth during the forecast period.
Telecommunications, one of the segments analyzed in the report, is projected to record a 7.7% CAGR and reach US$211.6 Billion by the end of the analysis period. After an early analysis of the business implications of the pandemic and its induced economic crisis, growth in the Computers & Peripherals segment is readjusted to a revised 3.2% CAGR for the next 7-year period.
Major drivers for the electronic contract manufacturing services market include advanced skills, economies of scale, as well as concentration in core competencies. The companies offering electronic contract manufacturing services take multiple contracts from several customers. Thus, providing services to multiple customers simultaneously facilitates them to acquire huge quantity of raw materials at a very low price. Moreover, companies can also take advantages of the expertise from contract manufacturers for manufacturing of electronic goods. Further, contract manufacturing also helps in business expansion into new and untapped markets. However, regardless of the advantages offered by contract manufacturing, certain key challenges are responsible for hampering the market growth. These challenges include, quality concerns, loss of intellectual property, and lack of control over manufacturing process. When a hirer company enters into a contract with contract manufacturing company, the hirer company has to disclose their technologies and production related formulas, which can result in loss of their significant private information. Furthermore, the hirer company has to rely on the contract manufacturer for maintaining quality thereby, losing its control over the quality of the product.
For attaining this, OEMs are seeking support from electronic contract manufacturing companies. These OEMs (hirer) subcontract electronic manufacturing contract companies to take advantage from their design expertise, supply chain management, and manufacturing capabilities. This helps the OEMs to leverage resources, reduce costs, access prominent manufacturing technologies, as well as reduce fixed capital investments and fulfil the Electronic Contract Manufacturing Services market demand.
In addition to this, electronic contract manufacturing also helps in retaining in-house activities and control responsibilities including, quality assurance, product cost management, network solutions integration, customer service, order management, customer interactions, and introduction of new products. These factors are highly responsible for propelling the Electronic Contract Manufacturing Services market growth for electronic contract manufacturing services during the forecast period.
The design & engineering segment is expected to notice a high growth during the projected period attributed to increasing preference of OEMs for subcontracting their design requirements. Also, the global market is observing an increase in growth, with the surging demand for electronic circuit boards attributed to its rising significance in several electronic devices including, smart phones and tablets. Several OEMs are subcontracting their circuit assembly requirements to contract manufacturers, resulting in significant increase in their profit margins.
The market operates in a highly competitive environment particularly, the players located in Taiwan and China are providing very economical subcontracted services for manufacturing. The current major focus of these vendors is to support and promote green technologies in their manufacturing processes. Another trend noticed in the current market scenario is increase in acquisitions, mergers and partnership activities. Moreover, the Electronic Contract Manufacturing Services market growth in the North American region is propelled by automotive as well as medical industries. Several R&D centers as well as healthcare institutes in North America are focused on the development of innovative diagnostic products that they plan to outsourcing from contract manufacturers. Such factors are expected to boost the market in the region.
The U. S. Market is Estimated at $121.5 Billion, While China is Forecast to Grow at 8.8% CAGR
The Electronic Contract Manufacturing Services market in the U. S. is estimated at US$121.5 Billion in the year 2020. China, the world`s second largest economy, is forecast to reach a projected market size of US$140.7 Billion by the year 2027 trailing a CAGR of 8.8% over the analysis period 2020 to 2027. Among the other noteworthy geographic markets are Japan and Canada, each forecast to grow at 2.8% and 5% respectively over the 2020-2027 period. Within Europe, Germany is forecast to grow at approximately 3.5% CAGR.
Consumer Electronics Segment to Record 3.6% CAGR
In the global Consumer Electronics segment, USA, Canada, Japan, China and Europe will drive the 3.2% CAGR estimated for this segment. These regional markets accounting for a combined market size of US$56.4 Billion in the year 2020 will reach a projected size of US$70.3 Billion by the close of the analysis period. China will remain among the fastest growing in this cluster of regional markets. Led by countries such as Australia, India, and South Korea, the market in Asia-Pacific is forecast to reach US$87.2 Billion by the year 2027, while Latin America will expand at a 4.5% CAGR through the analysis period. We bring years of research experience to this 18th edition of our report. The 454-page report presents concise insights into how the pandemic has impacted production and the buy side for 2020 and 2027. A short-term phased recovery by key geography is also addressed.
By Type - System Assembly Manufacturers, PCB Assembly Manufacturers, Design & Build Manufacturers
By Application - Consumer Electronics, Electronic Components, Computers & Peripherals, Industrial Electronics, Others
Competitors identified in this market include, among others:
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