Electronic Contract Manufacturing Companies: A Growing Industry

Recent research indicates electronic contract manufacturing companies are growing and will continue to do so into 2025. This market segment is a global industry with various firms providing such essential services and products as electromagnet assembly, custom cable and wire harness assembly and printed circuit board assembly. OEMs are the major customers of electronic contract manufacturers (EMs).

Factors Influencing Growth

As is the case with any industrial growth, certain factors are influential. In this industry, various forces are at play. Influencing the presence in the marketplace are the following:

* Competition: The electronics industry is highly competitive

* Complexity of technology and products: Electronics are increasingly becoming more complex

* Cost: OEMs are facing an increased demand to reduce their costs. EMs are capable of providing this through reducing OEMs’ overhead, training, and material usage

* Innovation: Technology is continuing to produce innovative products in electronics. Classic examples are forex cards, home monitoring systems, and leak detector systems

OEMs turn to electronic contract manufacturing companies to help them solve such production issues.


This partnership between OEMs and EMs is mutually beneficial to both parties. By turning over this aspect of their product to an EMs, OEMs can reduce internal costs since outsourcing (contracting) by OEMs reduces the costs arising from investing in equipment, training, materials, technology, and employees. They can draw upon the expertise and skills of the EMS professional staff in design as well as their proficiency in manufacturing and supply chain management. This action shifts these aspects over to the EMs who already focus on the specifics involved in electronics manufacturing and assemblies.

Electronic Contract Manufacturing Companies

The trend for close to a decade is to see more outsourcing by OEMs to EMs. In this process, electronic contract manufacturing companies will continue to reap the benefits from the need for OEMs to optimize their resources in as many ways as possible. This is not a local or national phenomenon. It is a global trend.

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