Telecom Electronic Manufacturing Services (EMS) Market Analysis Report By Service (Electronic Manufacturing, Electronic Engineering, Electronic Assembly, Supply Chain Management) And Segment Forecasts, 2018 - 2025

Industry Insights

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.

Services Insights

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.

Regional Insights

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.

Telecom Electronic Manufacturing Services (EMS) Market Share Insights

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.

Report Scope

Segments Covered in the Report

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