The Electronic Contract Manufacturing and Design Services market is in trends with higher adoption of advanced technologies enabled services by OEMs. Next generation electronics manufacturing driven by disruptive technologies like IoT, AI, and cloud computing are augmenting the demands for ECD services requiring higher engineering competencies.
Electronic Contract Manufacturing and Design (ECMD) services involve the manufacturing of printed circuit board assemblies (PCBAs), electronic components, wiring harnesses, box builds and complete electronics manufacturing on a contract basis. ECMD players offer value-added design and engineering expertise across various technology domains including embedded systems, industrial automation, networking and telecommunications, consumer electronics, automotive electronics, medical devices, avionics and more. They help OEMs focus on their core competencies while managing electronics manufacturing operations.
The Global Electronic Contract Manufacturing and Design Services Market is estimated to be valued at US$ 712.03 Bn in 2024 and is expected to exhibit a CAGR of 10% over the forecast period 2024 to 2031.
Key Takeaways
Key players operating in the Electronic Contract Manufacturing And Design Services Companies are Asteelflash, Benchmark Electronics, Inc., Celestica Inc., Compal Electronics, Inc., Delta Group, Fabrinet, Flex Ltd., Foxconn Technology Group, Inventec Corporation, Jabil Inc., Kimball Electronics, Inc., LACROIX – Electronics, New Kinpo Group, Plexus Corp., and Sanmina Corporation. Benchmarks extensive experience in design, manufacturing, materials procurement, supply chain management, logistics and aftermarket services positions it as a leader in aerospace and defense segment. Compal’s focus on notebook PCs, desktops, servers, handheld devices, networking products, wireless communications, automotive electronics, LED lighting, housewares and audio equipment enhances its presence in consumer electronics vertical.
Growing digitization and proliferation of smart connected devices is driving higher demands for electronics manufacturing outsourcing. 5G rollout, IoT adoption, greater uptake of electric vehicles and increasing usage of wearable devices are some of the key demand drivers. The increased usage of electronic modules in various industry verticals including automotive, healthcare, industrials, consumer electronics and others is propelling the ECD services market.
Key global players are expanding capabilities and capacities through acquisitions and partnerships to capture new market opportunities. Strategic investments in emerging nations of Asia Pacific, Latin America, Eastern Europe and Africa will drive further market consolidation and global expansion over the coming years.
Market key trends
The structural shift towards outsourcing of device design and manufacturing activities is a key trend fueling the Electronic Contract And Design Market Growth. OEMs are increasingly leveraging ECD players capabilities in design for manufacturing (DFM), product testing and certification, turnkey product development, prototyping and after sales support which helps accelerate time to market. Higher customization demands and shorter product life cycles necessitates strong collaboration between OEMs and ECD players at early design stages.
Porter’s Analysis
Threat of new entrants: The electronic contract manufacturing and design services market has moderate barriers for new entrants as it requires high capital investments and production experience for setting up the infrastructure including production facilities, capabilities, supply chain and technical know-how needed for serving top OEMs as well as emerging players in various industry verticals.
Bargaining power of buyers: Buyers have moderate bargaining power since the market has large number of existing players offering wide range of capabilities competing for new business mandates. However, large OEMs prefer established players with proven track record, scale and global footprint.
Bargaining power of suppliers: Being the second tier players in the supply chain, electronic contract manufacturers have low bargaining power over suppliers of raw materials and components as they need to rely and pass on the pricing to customers.
Threat of new substitutes: Substitute threat is low as electronics manufacturing services is a unique business model offering integrated capabilities across design, prototyping, testing and full production services under one roof making it difficult to substitute.
Competitive rivalry: The market is concentrated with top 10 players accounting for over 50% share and competition is intense among them on factors like pricing, capabilities, geographical reach, quality, delivery and innovative solutions.
Geographical regions: Currently, Asian countries like China, Taiwan, Thailand and Vietnam account for over 60% of the global electronic contract manufacturing and design services market value owing to availability of low-cost skilled workforce, resources and government support for electronics industry.
Fastest growing region: North America region is expected to witness the fastest growth during the forecast period on account of reshoring trend among US companies coupled with expanding domestic electronics, automotive and medical device industries that increasingly rely on electronics and highly skilled domestic EMS providers present in the region.
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