Telecom Electronics Manufacturing Services (EMS) Market Size, Share, Opportunities, COVID 19 Impact, And Trends By Services (Design & Engineering, Manufacturing, Assembly, Testing, Others), And By Geography - Forecasts From 2022 To 2027

Telecom Electronics Manufacturing Services (EMS) Market is estimated at US$7.815 billion in 2020 growing at a CAGR of 12.13% to reach a market size of US$17.412 billion by 2027.

The primary growth factors for the market growth of the telecom electronics manufacturing industry include the rising demand for communication devices and the continuously evolving trend of wireless communication. The major telecom manufacturing services include the design and manufacturing of the electronic components used across the telecom industry. The rising trend of contract manufacturing or subcontracting in the telecom sector across the globe is also one of the key factors which are expected to positively impact the growth of the market throughout the forecast period.

Furthermore, the adoption of these services further enhances the manufacturing services as it reduces the lead time and further helps to reduce the time to market. It also helps to move towards the leading and most advanced manufacturing technologies with considerably fewer capital investments, which is also anticipated to boost the adoption of these services throughout the forecast period.

Moreover, the technological innovation in the telecom industry and rising investments by key telecom companies for the adoption of the latest technology and the provision of enhanced and highly efficient services to their customers are anticipated to propel growth opportunities for the manufacturers throughout the forecast period. The shifting focus of telecom manufacturers on the activities that are majorly attributed to providing high value-added to the customers is leading to the subtraction of activities where the core competencies are not required, which is also projected to positively impact the growth of the market during the next five years.

The economic growth of the major emerging economies, such as China and India, is leading to rising disposable income and a growing middle-class population. This, in turn, is boosting the demand for communication devices and efficient services, which is further expected to increase investments by telecom providers for the expansion of quality services and thereby anticipate the demand for these services.

Furthermore, continuous technology is leading to the adoption of service subcontracting as rapid innovations in products and services due to growing consumer requirements frequently lead to the manufacturers' decreased focus on core competencies.  Furthermore, rising investments by major electronics companies in order to avail the manufacturing services in order to expand the production capacity on account of the growing market demand also show the potential for the growth of the market in the coming years. For instance, recently in 2020, Rohde & Schwarz, a German company dealing in the field of electronic, cybersecurity, radio monitoring and radiolocation, test equipment, broadcast & media, and radio communication entered into a partnership agreement with Benchmark Electronics Inc. a leading EMS, ODM, and OEM company as a global manufacturing partner to expand its manufacturing capacity and meet the growing demand of the products manufactured by the company by availing the manufacturing expertise of the company.

The rising internet penetration is anticipated to boost the market’s growth

The growing internet penetration coupled with rapid advancements in wireless technology is further expected to augment the demand for telecom infrastructure. The growing number of internet users globally is further leading to budding investments by the service providers for the development of faster and more advanced services in order to meet the requirements of the users by providing better services and gaining an advantage over other providers. For example, in 2008, only 22.959% of people worldwide used the internet; by 2020, this figure had risen to 59.9% (Source: The World Bank Group). A rising trend is expected in the coming years, which will further snowball the demand for fast and high-speed internet. As a result, investments in telecom infrastructure are expected to accelerate, contributing significantly to market growth

Booming investments in 5G technology are anticipated to propel the market growth opportunities.

As key market players invest heavily in order to gain a competitive advantage over others, emerging investments for the deployment of 5G technology are further leading to innovations in test technology.  For instance, National Instruments, a provider of a software-defined platform for accelerating the performance of automated tests and measurement systems, announced its latest mmWave Test Solution in May 2019, to address the test challenges of the 5G mmWave and RFIC transceivers and amplifiers in order to accelerate the commercialization of 5G technology. Moreover, 5G is expected to operate on much higher frequencies, which is further anticipated to the adoption of new interface and component technologies, which may further positively impact the growth of the market.

The design and engineering segment is expected to grow significantly during the forecast period.

On the basis of services, the market has been segmented into design & engineering, manufacturing, assembly, testing, and others. The design and engineering segment is anticipated to show decent growth over the forecast period. The growth of this segment is majorly attributed to the rising investments in R&D by key market players due to rising consumer demand for efficient services.

North America is anticipated to hold a decent share of the market

Geographically, the global telecom electronics manufacturing services market has been segmented as follows: North America, South America, Europe, the Middle East, Africa, and the Asia Pacific. The North American region is expected to hold a noteworthy share in the market on account of its well-established infrastructure and the presence of a highly advanced telecom industry. The market in the Asia Pacific region is expected to show notable growth during the forecast period owing to burgeoning investments in the telecom industry coupled with rapidly increasing investments in 5G technology in countries like China and South Korea.

Recent development and expansions

• Reliance Industries (RIL) signed an agreement to establish a joint venture (JV) with Sanmina Corp through an investment in the US-based company's Indian unit to build an electronics manufacturing hub in Chennai. As part of the government's "Make in India" manufacturing initiative, Reliance will become the second telecommunication company to establish a joint venture with an EMS provider.
• In July 2021 Ericsson, the Swedish telecom equipment maker confirmed its participation in the PLI scheme through its vendor Jabil Circuit. Jabil, their partner, is participating in the PLI scheme for the telecom sector. Ericsson As the first telecom vendor to begin manufacturing in India in 1994, the additional investments made under the PLI scheme will aid in the expansion of their Pune facilities, where they are currently producing 4G and 5G telecom equipment.

Impact of Covid-19 on the Telecom Electronics Manufacturing Services (EMS) Market

The COVID-19 pandemic has impacted a variety of industries, including the telecom, electronics and technology sectors. The pandemic has also influenced buyer behaviour and attitudes. The government imposed stringent restrictions on import/export policies, disrupting the market's supply chain. These factors and constraints hampered customer production and supply of goods. During the pandemic, the companies' production and sales rates were reduced.

Key Developments:

• Setember 2021: In order to capitalize on the rising demand for highly integrated technology products, Sanmina Corporation, a provider of Electronics Manufacturing Services, announced that it is strengthening its focus on its extensive optical, radio frequency (RF), and microelectronics (microE) design and production capabilities. With more than 15 years of experience offering mixed technology assembly and design services as well as best-in-class manufacturing solutions, the division has been formally established under the new brand name Advanced Micro Systems Technologies (AMST).
• March 2022: Dynetics, a fully owned subsidiary of Leidos, has chosen Benchmark Electronics, Inc., a global provider of engineering, design, and manufacturing services, to produce electronic components for the firm's Enduring Shield mobile ground-based weapon system. Enduring Shield is a component of the Indirect Fire Protection Capability Increment 2 initiative of the U.S. Army that is intended to track, engage, and destroy unmanned aerial vehicles, cruise missiles, artillery, rockets, mortars, and other aerial threats. At its location in Huntsville, Alabama, which is near to Dynetics and significant U.S. Army missile defence development initiatives, Benchmark will produce the electronics. Benchmark's cutting-edge production techniques will also aid Dynetics in keeping costs low.

Product Offerings:

• Benchmark Lark Technology: To address challenging size, weight, power, and cost (SWaP-C) issues, Benchmark Lark Technology delivers high-performance RF components. The development of smaller, lighter filtration required a unique set of abilities. Lark was developed into a new series of surface-mountable filters in order to achieve compact, high-performance filters that overcome many of the drawbacks of traditional waveguide technology. Engineers created a filter with a high Q, a small size, and simple integration with current planar technology using a dielectrically filled waveguide.
• NETMAN: The Network Management Initiative (NETMAN), developed by the DMTF, is a comprehensive set of standards for managing physical, virtual, application-centric, and software-defined networks. A wide range of devices in the 5G ecosystem may be readily managed using this scalable and functional Element Management System platform. Nearly all industry-standard southbound and northbound protocols are supported by NetMan, which can run on a range of platforms like Windows, Linux, etc., and communicate with a variety of databases. From a basic entry point to a high-performance complex device that needs the management of thousands of KPIs, NetMan-based EMSs have been used to manage a variety of devices.

Telecom Electronics Manufacturing Services (EMS) Market Scope:

Segmentation

• By Services
  • Design and Engineering
  • Manufacturing
  • Assembly
  • Testing
  • Others
• By Geography
  • North America
    • USA
    • Canada
    • Mexico
  • South America
    • Brazil
    • Argentina
    • Others
  • Europe
    • Germany
    • France
    • United Kingdom
    • Italy
    • Others
  • Middle East and Africa
    • Saudi Arabia
    • Israel
    • UAE
    • Others
  • Asia Pacific
    • China
    • Japan
    • South Korea
    • India
    • Indonesia
    • Taiwan
    • Thailand
    • Others

Frequently Asked Questions (FAQs)

Q1. What will be the telecom electronics manufacturing services market size by 2027?
A1. The global telecom electronics manufacturing services (EMS) market is estimated to reach a market size of US$17.412 billion by 2027.

Q2. What factors are anticipated to drive the telecom electronics manufacturing services market growth?
A2. The primary growth factors for the telecom electronics manufacturing services market growth include the rising demand for communication devices and the continuously evolving trend and the expansion of wireless communication.

Q3. What are the growth prospects for the telecom electronics manufacturing services market?
A3. The telecom electronics manufacturing services (EMS) market is estimated to grow at a CAGR of 12.13% during the forecast period.

Q4. What is the size of the telecom electronics manufacturing services market?
A4. Telecom Electronics Manufacturing Services Market was valued at US$7.815 billion in 2020.

Q5. Which region holds the largest share of the telecom electronics manufacturing services market?
A5. The North American region is expected to hold a noteworthy share in the telecom electronics manufacturing services market on account of its well-established infrastructure and the presence of a highly advanced telecom industry.