The global telecom electronic manufacturing services (EMS) market size was valued at USD 127.1 billion in 2016. It is expected to register a CAGR of 7.0% during the forecast period. Contract manufacturing or subcontracting plays a key role in the telecom industry. Currently, traditional telecom manufacturers are shifting their focus to activities that are aimed at bringing the highest value to their customers, while they subcontract activities where they do not have required core competencies. This trend is anticipated to positively influence the growth of the market.
Subcontracting offers a plethora of benefits such as reduced time to market, access to leading manufacturing technologies as well as logistic capabilities, and reduced capital investments. It is estimated to be a primary factor driving the market over the forecast years.
Additionally, economic growth, surging demand for communication services, technological innovations, and expansion of wireless communication are poised to be among the key trends escalating market growth. The telecommunication equipment vendor business model is highly technology-driven.
Equipment manufacturers are evolving from manufacturing switches to development of their own equipment, in addition to integration of products with their service offerings. Vendors often face challenges while focusing on core competencies owing to rapid technological changes in product and service offerings and thus, they prefer subcontracting.
The electronic design and engineering services segment is likely to post the highest CAGR of over 8.0% during the forecast period. Advancements in wireless communication and sensor technologies and big data capabilities are enabling IoT to transform the technology landscape. Electronic advancements are penetrating product engineering and designing process owing to increasing consumer expectation as well as requirements. This, in turn, is projected to contribute to the gr0wth of the segment.
The electronic manufacturing segment accounted for the leading share in the telecom EMS market in terms of revenue in 2016. OEMs are tapping into the trend of outsourcing product design as well as development to subcontractors in order to subsequently gain two major advantages, namely shift from fixed to variable cost and reduction in the overall cost. Several telecommunication electronic contract manufacturers are focusing on expanding their capabilities by offering new services with higher profit margins. This initiative by electronic manufacturers is expected to propel segment growth over the forecast period.
Asia Pacific was the leading revenue contributor in the global arena in 2016. The region is anticipated to retain its position until 2025, progressing at the highest CAGR of over 7.0% during the forecast period. There is a burgeoning trend among OEMs of outsourcing product design process, which allows them to focus on core competencies. The trend is gaining significant momentum in the region, which is estimated to supplement the growth of the market. Furthermore, Asia Pacific has been an irreplaceable electronic production hub for almost a decade owing to low labor cost and this factor has played a pivotal role in the dominance of the region over the past few years.
However, in recent times, with a rise in labor cost in the region, several countries such as China and other Southeast Asian countries are focusing on re-inventing themselves as manufacturers of complex products. For instance, Vietnam is projected to emerge as the next hub of electronics component production owing to funds offered by giants such as Samsung Electronics and LG Electronics, which has increased the country’s prominence in this supply chain. All these factors are poised to augment the regional market.
In 2016, APAC was followed by the North America market. Proliferation of smart devices and surging demand for green component manufacturing are likely to stoke the growth of the regional market. Furthermore, the booming telecom industry in the region is providing a boost to the market in the region.
Some of the prominent companies operating in the market are Flex Ltd.; Jabil Circuit, Inc.; Plexus Corp.; and Benchmark Electronics, Inc. A few growth avenues for the players in the market include diverse global presence and investments in supply chain models.
As the telecommunication sector continues to expand, owing to the entry of new service providers in the market, telecom EMS providers are able to leverage their capabilities to offer the best possible solutions and enable OEMs to focus on their core competencies.
Attribute |
Details |
Base year for estimation |
2016 |
Actual estimates/Historical data |
2015 |
Forecast period |
2017 - 2025 |
Market representation |
Revenue in USD Billion and CAGR from 2017 to 2025 |
Regional scope |
North America, Europe, Asia Pacific, South America, and Middle East & Africa |
Country scope |
U.S., Canada, Mexico, U.K., Germany, France, China, India, Japan, Taiwan, South Korea, Brazil |
Report coverage |
Revenue forecast, company share, competitive landscape, growth factors, and trends |
15% free customization scope (equivalent to 5 analyst working days) |
If you need specific information that is not currently within the scope of the report, we will provide it to you as a part of the customization |
This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2015 to 2025. For the purpose of this study, Grand View Research has segmented the global telecom electronic manufacturing services market report on the basis of services and region:
Service Outlook (Revenue, USD Billion, 2015 - 2025)
Electronic design & engineering
Electronics assembly
Electronic manufacturing
Supply chain management
Others
Regional Outlook (Revenue, USD Billion, 2015 - 2025)
North America
The U.S.
Canada
Mexico
Europe
The U.K.
Germany
France
Asia Pacific
China
India
Japan
Taiwan
South Korea
South America
Brazil
Middle East & Africa
GET A FREE SAMPLE
This FREE sample includes market data points, ranging from trend analyses to market estimates & forecasts. See for yourself.
NEED A CUSTOM REPORT?
We can customize every report - free of charge - including purchasing stand-alone sections or country-level reports, as well as offer affordable discounts for start-ups & universities.
Contact us now to get our best pricing.
ESOMAR certified & member
Leading SME award by D&B
We are GDPR and CCPA compliant! Your transaction & personal information is safe and secure. For more details, please read our privacy policy.
"The quality of research they have done for us has been excellent."
The exponential spread of COVID-19 worldwide has had an adverse impact on the semiconductor industry with manufacturing facilities temporarily shut, leading to a significant slowdown in the production. The outbreak could result in disruption across the ecosystem with several supply chain participants shifting their production facilities outside China, thereby reducing their over-reliance on China. Lockdowns imposed by the governments in the wake of the Covid-19 outbreak has not only affected manufacturing but also hauled consumer demand for semiconductor devices. Our analysts predict a decline in semiconductor revenue by over 1% in 2020 as compared to that in 2019. The report will account for Covid19 as a key market contributor.
We value your investment and offer free customization with every report to fulfil your exact research needs.