Telecom Electronic Manufacturing Services (EMS) Market Analysis Report By Service And Segment Forecasts From 2020 To 2027

Industry Insights

The global telecom electronic manufacturing services (EMS) market size was worth USD 152.59 billion in 2019. The market is estimated to register a 7.3% CAGR over the forecast duration, 2020 to 2027. Contract manufacturing plays a major role in the telecom industry. Nowadays, telecom manufacturers are focusing on activities that have higher customer values. In addition, they are subcontracting activities where they lack core competencies. Thus, this trend is estimated to bolster market growth from 2020 to 2027.

Subcontracting provides various benefits such as easy access to innovative manufacturing technology, logistic capabilities, reduced investment, and reduced time to market. These benefits are estimated to encourage the end-use industries to opt for subcontracting, which in turn, are projected to supplement the market growth.

In addition, increasing demand for communication services, growing wireless communication, technological innovations, and economic growth are anticipated to further spur the telecom electronic manufacturing services market growth. The business model of telecommunication equipment vendors is technology-driven.

Apart from the integration of products to services, equipment manufacturers are shifting from switch manufacturing to equipment development. Vendors find it challenging to focus on their core competencies due to rapid technological changes in the services and products. Therefore, the demand for subcontracting is gaining traction.

Services Insights

Based on the services, the electronic design & engineering services category is projected to register more than 8.0% CAGR over the forecast duration. Technological advancements in big data, sensors, and wireless communication have transformed the technology landscape with the help of IoT. Due to the rising consumer requirement and expectations, product engineering and design processes have become electronically advanced. This factor, in turn, is proliferating the market growth.

In 2019, the electronic manufacturing division held the maximum share in the market. Manufacturers are focusing on outsourcing design and development from subcontractors as it helps them in reducing overall cost. Various telecommunication electronic contract manufacturers are expanding their products and services to gain a higher profit, consequently, attributing to the growth of the market.

Regional Insights

Asia Pacific held the highest share in the telecom EMS market in 2019. Further, the region is anticipated to maintain its position by 2027. The region is projected to witness more than 7.0% CAGR from 2020 to 2027. OEMs are increasingly focusing on outsourcing product design. Outsourcing services help them focus on their core competencies. In addition, Asia Pacific is one of the major manufacturers of electronic products owing to the availability of low labor costs.

However, there has been an increase in labor costs in the past few years in the Asia Pacific countries such as China and other Southeast Asian nations. Owing to this, other emerging countries in the region are witnessing increasing investment. For example, LG Electronics and Samsung Electronics have invested in Vietnam.

The Asia Pacific was followed by North America in 2019. Increasing demand for green components and increasing penetration of smart devices are driving regional growth. In addition, North America is witnessing growth in the telecom industry, which in turn, is anticipated to drive regional growth over the next few years.

COVID-19 Impact Analysis

The market has been adversely affected owing to the outbreak of COVID-19. The pandemic has led to subsequent lockdowns across different parts of the world, which forced manufacturing companies to shut down their operations. Despite the automation, electronic manufacturing services are dependent on labor. The shortage of workforce during the pandemic has affected production. In addition, the lack of transportation has further derailed the supply chain, thereby, limiting the market growth. However, telecom companies are estimated to adapt to advanced technologies over the next few years to stay competitive in the market. This factor is anticipated to fuel the demand for outsourcing services, which in turn, is likely to drive the market growth.

Telecom Electronic Manufacturing Services (EMS) Market Share Insights

Key market participants are Jabil Circuit, Flex Ltd¸ Benchmark Electronics, and Plexus Corp. Companies are focusing on increasing their geographical presence along with strengthening supply chain models to gain competitive advantages in the market.

New players are continuously entering the market; as a result, the telecommunication market has expanded in the past few years. Telecom EMS vendors are leveraging the company's capabilities to provide the best possible solution. Telecom services providers are relying on these vendors as outsourcing helps them in focusing on their core competencies.

Report Scope

Segments Covered in the Report 

This 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 2016 to 2027. For this study, Million Insights has segmented the global telecom electronic manufacturing services market report based on services and region:

• Service Outlook (Revenue, USD Billion, 2016 - 2027)
    • Electronic design & engineering
    • Electronics assembly
    • Electronic manufacturing
    • Supply chain management
    • Others

• Regional Outlook (Revenue, USD Billion, 2016 - 2027)
    • North America
        • The U.S.
        • Canada
        • Mexico
    • Europe
        • The U.K.
        • Germany
        • France
    • The Asia Pacific
        • China
        • India
        • Japan
        • Taiwan
        • South Korea
    • South America
        • Brazil
    • Middle East & Africa