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Industry Insights, Market Size, CAGR, High-Level Analysis: Electronic Contract Manufacturing & Design Services MarketThe global electronic contract manufacturing and design services market size was valued at USD 417.0 billion in 2019, growing at a CAGR of 8.5% from 2020 to 2027. The growing functionalities, such as component assembly, engineering and design of printed circuit boards, sub-assembly manufacturing, and functional testing offered by contract manufacturers, are subsequently expected to drive the market over the forecast period. Electronic contract manufacturing is a form of engineering and manufacturing outsourcing services that provides a wide range of core manufacturing capabilities. Moreover, outsourcing of ancillary activities helps OEMs to focus on their core competencies, which helps them to improve their operational efficiencies, reduced production costs, and reduced fixed capital investment requirements. The electronic contract manufacturing and design services model is driven by a contract manufacturers ability to specialize in economies of scale in services, industrial design expertise, raw materials procurement, and pooling resources along with offering value-added services such as warranty and repairs. It allow OEMs to avoid having tedious or complex large-scale industrial operations. Moreover, OEMs outsource their circuit assembly requests to reduce time-to-volume and time-to-market production through utilization of technology solutions, design and engineering services, and manufacturing services by electronic contract manufacturing and design services providers. On account of these factors, the market is expected to gain traction over the forecast period. The proliferation of mobile devices, such as tablets and smartphones, has been the key propeller of the market over the last few years. The medical industry is anticipated to witness a significant growth owing to increasing demand for medical devices. The manufacturing of medical devices requires advanced technology and strict regulatory compliance. Thus, outsourcing such activities enables OEMs to accelerate its R&D activities, and to reduce the cost of devices in order to gain competitive advantage, which is expected to spur market growth. Furthermore, automotive, and aerospace and defense are projected to witness higher growth as compared to technical segments such as Information Technology and Telecom and consumer services. In spite of electronic contract manufacturing and design services providers having numerous advantages in the manufacturing processes, contract manufacturing cannot always be the best option for the OEMs. Many a times, the executives of the OEMs fail to understand that outsourcing the assembly processes can be more time-consuming and complicated than in-house services. Moreover, maintaining quality, cost control and, production volumes is expected to hamper the manufacturing services provided by electronic contract manufacturing and design services contract providers. In the process of passing on the responsibility of manufacturing to the experts, the OEMs end up making the relationship with the contract manufacturers less profitable
Service Insights of Electronic Contract Manufacturing & Design Services MarketElectronic manufacturing emerged as the leading service category in 2019 and accounted for over 44% of the overall revenue share. However, the electronic design and engineering segment is projected to witness a high growth over the forecast period owing to the surging inclination of OEMs towards outsourcing their designing requirements. The electronic contract manufacturing & design services market is witnessing an upsurge in the demand for electronic circuit boards due to its growing importance in several electronic devices, such as mobile phones and tablets. OEMs can design and test prototypes for the new product development. Additionally, the services provided by contractors enables less capital investment and advanced manufacturing techniques to OEMs for new product development. As, OEMs are increasingly outsourcing their circuit assembly requirements to electronic contract manufacturing and design services service providers, which substantially increases their profit margins. Owing to the aforementioned factors the demand for electronic contract manufacturing and design services is anticipated to grow over the forecast period. Furthermore, OEMs are increasingly considering outsourcing their design and engineering to substantially reduce costsand improve flexibility. They are increasingly investing in R&D activities and other strategic initiatives to streamline their production processes in order to sustain in the highly competitive environment. However, implementation of advanced technologies by electronic contract manufacturing and design services providers such as 3D printing, Artificial Intelligence (AI) for automation results in high-initial investment by OEMs. Also, the establishment of in-house production is a key challenge faced by majority of the manufacturers, thus owing to which outsourcing is a preferable option for OEMs to keep pace with growing competitive environment.
End-Use InsightsThe demand for electronic contract manufacturing services is anticipated to grow owing to rising applications across non-technical end-use segments such as healthcare, automotive, industrial, and aerospace and defense. The low penetration of electronic contract manufacturing and design services in these segments is creating higher opportunities for contract manufacturers to establish a strong foothold in the segments. The IT and telecom segment emerged as the largest end-use segment and accounted for over 47% of the total market revenue in 2019. However, growing outsourcing trends in the healthcare, automotive, defense, and other non-technical segments are projected to spur their market shares over the forecast period. Furthermore, the upsurge in demand for electrical vehicles has elevated the need to outsource their electronic component manufacturing, thereby spurring the market for electronic contract manufacturing and design services in the automotive sector. The healthcare industry is anticipated to witness a significant growth owing to rise in demand for medical devices. These include computed tomography scanner assemblies, blood analyzers, ultrasound imaging systems, and blood glucose meters. The escalating need to optimize resources, low fixed capital investment, and improved product development emerged as key factors contributing towards the market for electronic contract manufacturing and design services across several end-use industries such as medical, automotive, aerospace and defense, consumer electronics, and IT and telecommunication.
Regional Insights of Electronic Contract Manufacturing & Design Services MarketAsia Pacific is expected to exhibit the highest growth followed by North America, which is anticipated to the rise of outsourcing activities in these regions. Asia Pacific held the largest market share in 2019 and is estimated to remain the fastest growing segment over the forecast period. Moreover, China accounted for more than 33% share in the region and holds a dominant position in electronics manufacturing. The mass availability of raw materials and low-cost labor are the major drivers expected to favor the growth of the market for electronic contract manufacturing and design services. Furthermore, the market in North America growth is majorly driven by the medical and automotive industries. The medical industry is a high mix-low volume sector, which offers higher profit margins to electronic contract manufacturing and design services players in this region. Various R&D centers and medical institutes are located in North America that work on advanced and portable diagnostic products, which they plan to source through contract manufacturers. All these factors are cumulatively expected to spur the market for electronic contract manufacturing and design services in North America over the forecast period. Key players such as FLEX; Sanmina Corp; and Jabil Circuit, Inc. are planning to expand their manufacturing facilities in Europe thereby increasing the production capacity. In addition, a shift to advanced manufacturing techniques in America and Europe is estimated to spur the electronic contract manufacturing and design services demand in these regions over the forecast period.
Electronic Contract Manufacturing and Design Services Market Share InsightsThe competitive rivalry in the market is high owing to the presence of several dominant players. Key players operating in the market for electronic contract manufacturing and design services include Hon Hai Precision Industry Co., Ltd.; Flextronics International, Ltd.; Jabil Circuit, Inc.; Sanmina Corporation; Venture Corporation; and Benchmark Electronics, Inc. The presence of well-established players has intensified the industry rivalry, due to which the degree of competition is considerably higher. These market players particularly focus on entering into mergers and acquisitions and joint ventures/collaborations in order to enhance their market presence. Market players in the developing economies are offering low-cost, outsourced services to the production and designing sectors. Thus, owing to economical subcontracted services for manufacturing has resulted in increased competition between the market players. Moreover, the major operating players are investing in research and development in order to offer better outsourcing services. Additionally, major market players are focusing on improving their operational efficiency and supply chain to gain a competitive edge in the market.
Segmentations, Sub Segmentations, CAGR, & High-Level Analysis overview of Electronic Contract Manufacturing & Design Services Market Research ReportThis report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2019 to 2030. For the purpose of this study, this market research report has segmented the global electronic contract manufacturing and design services market report based on service, end use, and region:
Service Outlook (Revenue, USD Billion, 2019 - 2030)
- Electronic design & engineering
- Electronics assembly
- Electronic manufacturing
End-Use Outlook (Revenue, USD Billion, 2019 - 2030)
- Aerospace & Defense
- IT & Telecom
- Power & Energy
- Consumer Electronics
Table of Contents Chapter 1. Methodology and Scope 1.1. Research Methodology 1.2. Research Scope & Assumptions 1.3. List of Data SourcesChapter 2. Executive SummaryChapter 3. Electronic Contract Manufacturing and Design Services Industry Outlook 3.1. Market Segmentation 3.2. Market Size and Growth Prospects, 2016 - 2027 3.3. Value Chain Analysis 3.4. Market Dynamics 3.4.1. Market driver analysis 3.4.2. Market restraint analysis | read more...