Worldwide Electronic Manufacturing Services Industry to 2026 - Rise in the Sales and Number of Electric Vehicles is Driving Growth
DUBLIN, Aug. 10, 2021 /PRNewswire/ -- The "Electronic Manufacturing Services Market - Forecasts from 2021 to 2026" report has been added to ResearchAndMarkets.com's offering.
The electronic manufacturing services market is projected to witness a compound annual growth rate of 11.94% to grow to US$364.215 billion by 2026, from US$165.354 billion in 2019. The market is expected to surge in the coming years due to the rise in the number of electric vehicles, cost reduction in the manufacturing process, and increasing investments in R&D. With the increasing innovation and advancement of emerging technologies, such as 5G and the IoT, electronic component manufacturing and designing had been revolutionized. There has been a surge in the demand for electronics manufacturing services in the consumer electronics industry, because of its growing connectivity among its products, like gaming, audio, wearable, and virtual reality. The increasing investments in the semiconductor industry are expected to play a major role in the overall market growth.
According to the semiconductor industry association, the total sales of semiconductors was US$439 billion in the year 2020, with a rise of 6.5%, from the previous year. There have been a plethora of novel initiatives and developments in the market, in the past few years. For instance, in June 2021, Microart Services, a key electronic manufacturing services provider, announced that it had joined forces with an engineering firm, Berlin KraftWorks Inc., intending to bridge the gap between ideation and total volume commercial production. This development is expected to have a positive impact on the market in the coming years. In June 2021, PG Electroplast, one of the key players in the electronic manufacturing services market, announced that it had approved an investment worth INR766 million, and would use the investment to enhance India's manufacturing capabilities.
Rising sales of electric vehicles.
The market is expected to surge in the coming years, due to the rise in the sales and number of electric vehicles, worldwide. The electrification of the automobile has been one of the most disruptive and innovative changes in the automobile sector, globally. In the transition towards complete electrification, auto producers and manufacturers have been matching the pace in innovation and advances in component and technical capabilities. This has given the rise in the demand for advancement in electronic manufacturing services (EMS) in electronic component manufacturing and process, developing electronics in the automotive industry more reliable, cost-efficient, and smaller.
The rise in the demand for electric vehicles is expected to have a positive impact on the market. According to the International Energy Agency, sales of electric cars were 2.1 million in the year 2019, with a register of 40% year-on-year increase. Around half a million electric buses had been in circulation in 2019, with most of them in China. The increasing tax incentives on electric vehicles in the United States and China are expected to boost overall electric vehicle sales. Major companies have been making significant developments in the market, in the past few years. For instance, Pegatron, an EMS provider, had been tapped by Tesla to develop and make control computers for Tesla's Model 3 electric vehicle. Pegatron had been chosen because of its ability as an EMS provider to reduce its tablets, notebooks, and all in computer manufacturing and production. These trends are expected to have a positive impact on the market, in the coming years.
Consumer electronics to hold a significant share.
By Industry vertical, the electronic manufacturing services market is segmented as healthcare, aerospace and defense, automotive, telecom and IT, consumer electronics, and Others. Electronic manufacturing services are widely used by companies across industry verticals. Companies offer services of manufacturing, testing, designing, and repairing either electronic components or assemblies for OEMs. Applications offered in the electronic manufacturing service segment are broad and diverse. Electronic manufacturing series can be applied in various industries across the global market, thereby augmenting widespread adoption across industry verticals. The consumer electronics market is estimated to hold a significant share in 2019 while the EMS market for automotive is estimated to grow at a rapid pace during the course of the forecast period.
Good growth opportunities in the United States.
The United States electronic manufacturing services market is set to expand throughout the forecast period to attain a notable market size by the end of the forecast period. The prime factor for growth in the region is the presence of major market players in the country like Benchmark Electronics, Flex Ltd., Plexus Corp, Jabil Inc., and Celestica Inc. The increasing demand for electronics in the country is further facilitating the growth of the market. Moreover, increasing services provided by the key market players are propelling the wide adoption of contractual services by OEMs to increase their focus on the core operations and further invest in improving their productivity.
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