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The unseen workforce, tirelessly operating behind the scenes, plays a crucial role in delivering the latest tech devices to consumers. They form the backbone of the electronics revolution: the companies within the Electronic Manufacturing Services (EMS) industry.

Electronic products are everywhere—from smartphones and computers to wearable fitness trackers and medical equipment. These advanced devices are made possible by the expertise of the EMS sector, which specializes in electronic manufacturing. This leading industry player is projected to soar to an impressive USD 1.02 trillion by 2032.

Introducing EMS

Electronic manufacturing companies provide a full range of services for electronic devices. These services generally cover the entire product lifecycle, from offering support in product design and development to post-sales assistance for original equipment manufacturers (OEMs).

Why is the EMS industry booming?

The EMS industry is experiencing remarkable growth because of the following: 

• Emphasis on key capabilities

The EMS market is growing as companies focus on core strengths, outsourcing non-core activities like manufacturing. This allows them to concentrate resources on marketing and innovation, enhancing their competitive edge. Such resource reallocation boosts efficiency and profitability, making EMS providers essential partners for high-quality production and streamlined processes. 

• The growing electronics market

The rising demand for electronics in consumer, medical, and industrial applications is driving the need for efficient manufacturing of electronic components. Segments like transportation and industry are significant sources of outsourcing demand. The total electronics assembly value is projected to grow from $1.3 trillion in 2023 to $1.5 trillion by 2028. 

• Increasing demand for telecommunications infrastructure

The surge in mobile devices, the Internet of Things (IoT), and the rapid rollout of 5G technology necessitate a robust telecom framework. This significant development, in turn, boosts the demand for various electronic components essential for supporting and enhancing these innovative technologies and manufacturing capabilities.

• Surge in labor expenses

Manufacturing costs, particularly labor expenses, are rising in developed economies, prompting OEMs to source production in locations with more affordable labor. Many EMS companies have set up operations in these areas. However, outsourcing declined in 2023 because of an economic downturn in the computer and telecommunications sectors, resulting in an 8.1% industry contraction.

• Tech advancements

Modern electronics incorporate sophisticated features, requiring intricate circuit board designs, component miniaturization, and precise assembly techniques. To provide effective manufacturing solutions, EMS companies continually allocate resources to research and development, embracing cutting-edge technologies and methods that address the increasing intricacies of today’s tech products while ensuring high-quality production standards.

• Skills improvement

Skills improvement can significantly enhance the EMS industry by boosting product quality, increasing efficiency, and fostering innovation. A well-trained workforce adapts to new manufacturing technologies, leading to higher output and lower costs for industries. Additionally, investing in employee development improves retention rates and enhances customer satisfaction, ultimately driving business growth.

• Value-driven manufacturing solutions

Cost-effective manufacturing solutions drive the growth of EMS by enabling companies to reduce production costs. By leveraging advanced technologies and streamlined processes, EMS providers offer scalable, high-quality production that meets market demands, allowing businesses to focus on innovation and product development while minimizing overhead expenses.

Top 8 EMS industry trends

The EMS industry is set for ongoing growth and change, propelled by a range of emerging trends: 

1. The rise of smart factories

Industry 4.0 principles are ushering in smart factories within the EMS sector, where manufacturing technologies drive industries’ production optimization, enhance competency, and provide real-time operational insights. At the forefront of IoT, electronics connect previously isolated systems, with smart factories fundamentally changing the industry landscape.

2. Custom solutions and flexibility

With shorter product lifecycles and diverse consumer requirements, the need for flexible and responsive manufacturing solutions is growing. EMS companies capable of offering specialized production cycles and meeting unique client specifications will gain a competitive edge, positioning themselves for long-term success in a dynamic market.

3. Supply chain management and risk reduction

EMS companies leverage their international reach and established transportation systems to assist OEMs in managing intricate supply chains and mitigating risks, ensuring timely component delivery. This adaptability is crucial during uncertainties like economic downturns or unforeseen interruptions. By outsourcing manufacturing, companies gain scalability, allowing EMS suppliers to adjust production levels based on client demand, driving market revenue. 

4. Increased product research and development

Major industry leaders are significantly allocating resources to research and development to diversify their product offerings, further boosting the Electronic Manufacturing Services market. Companies are also pursuing strategic initiatives such as new product introductions, partnerships, and mergers to enhance their global presence and remain competitive by providing cost-effective solutions in a growing market.

5. Highlighting greener practices

As environmental awareness rises, EMS companies that embrace sustainable initiatives become preferred partners for OEMs aiming to lessen their ecological impact. Many firms are adopting environmentally conscious methods to meet international benchmarks, advancing their sustainability goals amid growing regulatory pressure, often targeting carbon neutrality by 2030. This focus enhances competitiveness and benefits the entire supply chain.

6. Miniaturization

An example of miniaturization is the reduction in dimensions of surface-mounted devices. While PCB transistor density has risen, overall component size has shrunk, enhancing processing efficiency. Smaller electronics optimize space, weight, and power, boosting manufacturing productivity. This technology is crucial for industrial automation, increasing energy storage capabilities in renewable energy systems. 

7. Competence in next-gen technologies

EMS companies will consistently invest in enhancing their workforce's skills and gaining proficiency in emerging technologies such as artificial intelligence (AI) and sophisticated electronic assembly techniques. This strategic approach will enable them to assist OEMs in the development and production of innovative, state-of-the-art products that meet evolving market demands and customer expectations. 

8. Immersive technology

An important aspect of electronics development is immersive technology, which includes augmented reality (AR) and virtual reality (VR). These technologies enhance quality, productivity, and training across industries like gaming and healthcare. They allow design and engineering teams to visualize their concepts, facilitating easier diagnosis and correction of features, thus reducing costs and time in prototyping.

By adopting innovative manufacturing technologies in engineering, responding to changing market needs, and cultivating robust relationships with OEMs, the EMS industry will remain instrumental in influencing the future of electronics manufacturing.

As one of the Top 20 EMS companies in the world, IMI has over 40 years of experience in providing electronics manufacturing and technology solutions.  

We are ready to support your business on a global scale.

Our proven technical expertise, worldwide reach, and vast experience in high-growth and emerging markets make us the ideal global manufacturing solutions partner. 

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