Telecom Electronic Manufacturing Services Market (By Services: Electronic Design & Engineering, Electronics Assembly, Electronic Manufacturing, Supply Chain Management, Others) - Global Industry Analysis, Size, Share, Growth, Trends, Regional Outlook, and Forecast 2024-2033

The global telecom electronic manufacturing services market size reached USD 207.55 billion in 2023 and is projected to hit around USD 426.97 billion by 2033 with a CAGR of 7.48% from 2024 to 2033.

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Key Takeaways

• Asia-Pacific contributed the largest share of the market in 2023.
• North America is estimated to expand at the fastest CAGR between 2024 and 2033.
• By services, the electronic manufacturing segment dominated the market with the largest share in 2023.
• By services, the electronic design & engineering segment is anticipated to grow at a remarkable CAGR during the forecast period.

Telecom Electronic Manufacturing Services Market in the Asia-Pacific 2024 to 2033

The Asia-Pacific telecom electronic manufacturing services market size reached USD 97.55 billion in 2023 and is projected to hit around USD 200.68 billion by 2033 with a CAGR of 7.48% from 2024 to 2033.

Asia-Pacific held the largest share of 47% in 2023, due to several factors. The region benefits from robust telecommunications infrastructure development, increasing demand for electronic devices, and a thriving manufacturing ecosystem. Countries like China, Japan, and South Korea are key contributors, with well-established electronics industries. Additionally, the availability of skilled labor, technological expertise, and favorable government policies supporting the electronics sector further strengthen Asia-Pacific's dominance in the global Telecom electronic manufacturing services market. The region continues to be a focal point for production, innovation, and market growth.

North America is positioned for rapid growth in the telecom electronic manufacturing services market due to factors like increasing demand for advanced telecom infrastructure, the widespread deployment of 5G technology, and a surge in outsourcing by telecom companies. The region's technological advancements and a robust regulatory framework also contribute. As telecom companies seek specialized manufacturing expertise, North America's EMS providers are well-positioned to meet these needs, fostering the region's substantial growth in the dynamic and evolving telecom electronics manufacturing sector.

Meanwhile, Europe is experiencing notable growth in the telecom electronic manufacturing services market due to several factors. The region's strong focus on 5G technology deployment, coupled with the increasing demand for connected devices, drives the need for specialized electronic components. Additionally, supportive government policies and incentives for electronics manufacturing contribute to the expansion of EMS providers. The growing trend of outsourcing by telecom companies in Europe, seeking cost-effective and efficient solutions, further propels the market's growth, positioning the region as a key player in the global telecom EMS industry.

Telecom Electronic Manufacturing Services Market Overview

The telecom electronic manufacturing services market involves specialized companies that help design, produce, and manage electronic components for the telecommunications industry. These services include assembling and testing printed circuit board assemblies (PCBAs) used in telecom devices. An avionics company, for instance, might choose to outsource its PCBA production to an EMS partner to expand its product offerings without investing in additional manufacturing facilities. These services providers adhere to industry standards, such as AS9100, and can handle complex requirements like multiple Ball Grid Arrays (BGAs) and intricate PCB designs. 

Telecom Electronic Manufacturing Services Market Data and Statistics

• According to the India Brand Equity Foundation (IBEF), the recent valuation of the Indian appliances and consumer electronics industry reached USD 9.84 billion, with a projected ambitious goal to surpass INR 1.48 lakh crore (USD 21.18 billion) by 2025.
• In a strategic move, an avionics company has opted to transfer its PCBA production to an Electronic Manufacturing Services (EMS) partner. This decision aims to diversify its product and service portfolio without the need for additional investments in manufacturing. Key requirements for the EMS partner include adherence to AS9100 standards and the ability to handle multiple Ball Grid Arrays (BGAs) on the Printed Circuit Board Assemblies (PCBAs), some of which may involve up to 16 layers.
• In alignment with the government's initiatives, 14 companies have received approval under the IT hardware Production-Linked Incentive (PLI) scheme. Over the next four years, these companies are poised to contribute significantly, with an anticipated total production value of USD 21.64 billion.
• The Indian government has granted approval for 100% Foreign Direct Investment (FDI) in the electronics systems design and manufacturing sector through the automatic route. Notably, FDI limits in single-brand retail have risen from 51% to 100%, and there are plans to increase the FDI limit in multi-brand retail to 51%. These policy developments are expected to be key drivers of market growth.
• According to estimates by the International Finance Corporation (IFC), around 65 million firms, representing approximately 40% of formal micro, small, and medium enterprises in developing countries, face unmet financial needs.
• IBEF reports that India's electric vehicle (EV) market is poised to reach INR 50,000 crores (USD 7.09 billion) by 2025. Additionally, a study conducted by the CEEW Centre for Energy Finance identifies a substantial USD 206 billion opportunity for electric vehicles in India by 2030.

Growth Factors

• The burgeoning demand for seamless connectivity and the proliferation of mobile devices worldwide drive the need for telecom electronic manufacturing services. As more regions and industries embrace digital communication, there is a growing market for electronic components used in telecommunications infrastructure and devices.
• The global rollout of 5G networks represents a significant growth factor for telecom electronic manufacturing services. The implementation of 5G technology requires specialized components and intricate manufacturing processes, presenting opportunities for EMS providers to cater to the evolving needs of telecom companies.
• Telecom companies are increasingly outsourcing their manufacturing needs to focus on core competencies. This outsourcing trend benefits the electronic manufacturing services market, providing cost-effective solutions and enabling telecom companies to adapt quickly to market changes.
• The continuous evolution of telecommunications technologies, including the integration of artificial intelligence, Internet of Things (IoT), and advanced networking solutions, fuels the demand for specialized electronic components. Telecom EMS providers play a crucial role in delivering the expertise needed to manufacture complex and high-performance devices.
• Supportive government initiatives, such as incentives for electronics manufacturing and favorable regulatory policies, contribute to the growth of the telecom electronic manufacturing services market. In regions where governments encourage investment and development in the electronics sector, EMS providers find a conducive environment for expansion.
• The expansion of telecom services into emerging markets, coupled with the ongoing digital transformation across industries, creates new opportunities for electronic manufacturing services. The need for customized, high-quality electronic components to support digital infrastructure development and connectivity initiatives further propels market growth.

Telecom Electronic Manufacturing Services Market Scope

Telecom Electronic Manufacturing Services Market Dynamics

Driver: Increasing Demand for Telecommunication Services

• As of 2021, the number of mobile phone users worldwide exceeded 5.2 billion, indicating a substantial market for telecom devices and infrastructure.

The growing demand for telecommunication services is a key catalyst for the expansion of the telecom electronic manufacturing services market. As more people worldwide embrace mobile phones and data-driven communication, the need for advanced telecom devices and infrastructure rises. With over 5.2 billion mobile phone users globally in 2021, the surge in connectivity drives telecom companies to seek reliable partners for manufacturing electronic components. This increased demand for telecommunication services not only necessitates the production of more devices but also demands cutting-edge technology and expertise in electronic manufacturing, creating a substantial market for EMS providers.

Telecom EMS companies play a pivotal role in meeting the escalating demand by offering specialized manufacturing services. These services encompass the production of complex components, such as printed circuit board assemblies (PCBAs), supporting the development of advanced telecom devices. As the telecommunications sector continues to grow, EMS providers become essential partners for companies aiming to meet the evolving demands of a connected world efficiently and effectively.

Restraint: Intensive Capital Requirements

Intensive capital requirements pose a significant restraint on the telecom electronic manufacturing services market The industry demands substantial investments in cutting-edge equipment, technology, and workforce training. For smaller players in particular, these high upfront costs can act as a barrier to entry and growth. Acquiring and maintaining state-of-the-art manufacturing facilities capable of meeting the evolving demands of the telecom sector requires a considerable financial commitment.

Moreover, the need for ongoing capital expenditure to stay technologically competitive puts financial strain on EMS providers. Continuous investment in research and development, upgrading machinery, and training personnel is essential. For some companies, especially those with limited financial resources, navigating these intensive capital requirements becomes challenging, impacting their ability to compete effectively in the market and potentially limiting their capacity to adapt to emerging industry trends.

Opportunity: Digital transformation across industries

The ongoing digital transformation across industries presents lucrative opportunities for telecom electronic manufacturing services (EMS) providers. As various sectors embrace advanced technologies like Internet of Things (IoT), artificial intelligence, and smart automation, the demand for specialized electronic components surges. Telecom EMS companies can capitalize on this trend by diversifying their offerings to cater to industries undergoing digitalization, including healthcare, automotive, and smart cities. By providing tailored electronic manufacturing services to support the evolving needs of these sectors, EMS providers position themselves as key enablers of the broader digital transformation landscape.

Moreover, as industries increasingly rely on interconnected devices and smart technologies, the role of EMS becomes pivotal in ensuring the seamless production of high-quality electronic components. The adaptability of EMS providers to address the unique requirements of different sectors undergoing digital transformation not only drives market growth but also positions them as essential partners in the advancement of modern industries.

Services Insights

The electronic manufacturing segment held the largest market share based on the end-use in 2023.  In the telecom electronic manufacturing services market, the electronic manufacturing segment involves the comprehensive production of electronic components, from design to assembly, testing, and packaging. This segment caters to the specific requirements of telecom companies seeking specialized manufacturing expertise. Trends in this segment include a growing focus on end-to-end solutions, agile manufacturing processes, and the integration of emerging technologies like robotics and automation. These trends aim to enhance efficiency, reduce time-to-market, and ensure the delivery of high-quality electronic components for the rapidly evolving telecom industry.

The electronic design & engineering segment is anticipated to witness rapid growth at a significant CAGR of 9.3% during the projected period. In the telecom electronic manufacturing services market, the electronic design & engineering segment involves the creation and optimization of electronic components used in telecommunications. This service encompasses designing circuitry, developing schematics, and ensuring the efficiency of electronic systems. A prominent trend in this segment is the increasing emphasis on miniaturization, energy efficiency, and the integration of advanced technologies to meet the evolving demands of the telecom industry. Providers in this space focus on delivering innovative solutions that enhance the performance and functionality of electronic components in the rapidly advancing field of telecommunications.

Recent Developments

• In August of 2022, Celestica Inc., a company specializing in design, manufacturing, and supply chain solutions for innovative companies, unveiled a range of new storage solutions. Notable among these are the Athena G2, a state-of-the-art 2U rackmount NVMe storage array; the Nebula G2, an all-flash storage expansion featuring PCIe 4.0 NVMe SSDs; and the Titan G2, an advanced 4U dense storage array. These cutting-edge products provide unmatched flexibility and customizable options to meet the rigorous demands of contemporary applications, whether deployed on-premises or in public clouds.
• In June 2022, Flex announced its strategic initiative to bolster its presence in the automotive industry by expanding its operations in Jalisco, Mexico. The forthcoming project involves the construction of a cutting-edge facility spanning 145,000 square feet. This state-of-the-art facility is poised to become a pivotal manufacturing hub in the region, with a focus on producing advanced electronic components to propel the advancement of electric and autonomous vehicles.
• In March 2021, PleXUs, a leader in complex product design, manufacturing, supply chain, and aftermarket services, initiated the construction of a cutting-edge manufacturing facility in Bangkok, Thailand. Covering an impressive 400,000 square feet, this new facility comprises two production and warehousing levels along with four office space levels. Demonstrating a commitment to upholding environmental, social, and governance (ESG) best practices, PleXUs has seamlessly integrated various energy-efficient and green building initiatives into the facility's design.

Telecom Electronic Manufacturing Services Market Companies

• Foxconn Technology Group
• Jabil Inc.
• Flex Ltd.
• Celestica Inc.
• Benchmark Electronics, Inc.
• Sanmina Corporation
• Plexus Corp.
• Kimball Electronics, Inc.
• Wistron Corporation
• Universal Scientific Industrial Co., Ltd. (USI)
• Zollner Elektronik AG
• Venture Corporation Limited
• SIIX Corporation
• Elcoteq SE
• SMTC Corporation

Segments Covered in the Report:

By Services

• Electronic Design & Engineering
• Electronics Assembly
• Electronic Manufacturing
• Supply Chain Management
• Others

By Geography

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East and Africa