Global Electronic Contract Assembly Market Size (2024 - 2029)

The electronic contract assembly market is experiencing significant growth, driven by the need for manufacturers to adapt their business models in response to volatile economic conditions. This market expansion is largely attributed to the outsourcing of assembly tasks, which allows original equipment manufacturers to reduce fixed costs, enhance flexibility, and focus on strategic initiatives like product development. The demand for contract assembly services is expected to rise, particularly in sectors such as automotive and healthcare, where there is a growing reliance on electronics and a need for improved manufacturing efficiency. The ongoing challenges posed by the COVID-19 pandemic have further compelled manufacturers to rethink their supply chain strategies, contributing to the market's expansion.

Market Size of Global Electronic Contract Assembly Industry

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electronic contract assembly market
Study Period 2019 - 2029
Base Year For Estimation 2023
CAGR 9.20 %
Fastest Growing Market Asia Pacific
Largest Market North America
Market Concentration Medium

Major Players

electronic contract assembly market size

*Disclaimer: Major Players sorted in no particular order

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Electronic Contract Assembly Market Analysis

The Electronic Contract Assembly Market was valued at USD 105.41 billion in 2020 and is expected to reach USD 178.74 billion by 2026, at a CAGR of 9.2% over the forecast period 2021 - 2026. Outsourcing on a contract basis is considered a way to ease up the business model for manufacturing engineers. Third-party companies like Connect Systems and Foxconn assemble most printed circuit boards and other electronic devices so that the OEMs can focus more on product innovation.

  • Volatile economic conditions have forced the manufacturers to reassess their traditional business models and concentrate on the bottom line. A majority of the executives view contract assembling as an opportunity, primarily to reduce costs, improve flexibility, and streamline their production processes.
  • Outsourcing tasks to an electronics manufacturing services provider primarily allows the original equipment manufacturers (OEMs) to significantly cut their fixed costs while freeing cash to invest in strategic initiatives, such as new product development or marketing. It also lets a company reduce labor costs by shrinking its direct workforce.
  • The establishment of in-house production is a crucial challenge faced by the majority of the players, owing to which outsourcing is considered a preferable option for them to save costs. As such, the demand for this service is expected to rise at a healthy rate shortly. PCB assembly services are widely considered by most OEMs, as they lack the technical knowledge and are considered crucial components in any electronic device.
  • For one, the automotive industry is rapidly increasing its use of electronics to enhance comfort, safety, performance, and overall driving experience. As a result of more extended vehicle warranty periods, automobile manufacturers are demanding higher reliability, improved manufacturing efficiency, and vastly reduced warranty failures from their Tier 1 suppliers.
  • Healthcare electronics is another primary sector where contract assembly is seen to reduce costs while improving efficiency. Due to the continued growth in the medical and biomedical markets, companies like Saline Lectronics have previously invested in certifications necessary for circuit board assembly manufacturing.
  • Adding to the electronics industry's existing challenges is the ongoing impact of the COVID-19 outbreak on the global supply chain. With still months away from the containment of the virus, manufacturers are currently focusing on rethinking their strategies and looking beyond China to find alternative supply chain sources.

Electronic Contract Assembly Industry Segmentation

The electronic contract manufacturing (ECM) services primarily refer to various services that include engineering design, PCB fabrication, subassembly manufacturing, functional testing, various assembly services, distribution, and order fulfillment on behalf of the OEMs (Original Electronic Manufacturers). These electronic contract service providers are primarily utilized as either a supplement or a replacement to the company-owned manufacturing operations.

Type of Activity
PCB Assembly Services
Cable/Harness Assembly Services
Membrane/Keypad Switch Assembly Services
Application
Healthcare
Automotive
Industrial
IT and Telecom
Other Applications
Geography
North America
United States
Canada
Europe
United Kingdom
Germany
France
Rest of Europe
Asia Pacific
China
Japan
India
Rest of Asia Pacific
Latin America
Middle East and Africa
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Global Electronic Contract Assembly Market Size Summary

The electronic contract assembly market is experiencing significant growth, driven by the increasing trend of outsourcing manufacturing processes to third-party companies. This approach allows original equipment manufacturers (OEMs) to focus on product innovation while reducing costs and improving flexibility. The market is characterized by a fragmented and competitive landscape, with key players in developing economies offering low-cost services to enhance their competitiveness. The demand for contract assembly services is expected to rise as manufacturers seek to streamline production processes and cut fixed costs. Industries such as automotive and healthcare are particularly benefiting from these services, as they require high reliability and efficiency in their electronic components.

Regions like China, India, and Japan are poised to drive substantial demand for contract assembly services, supported by government initiatives in technology development and smart devices. China, in particular, holds a dominant position in the global electronics production and assembly market, with significant advancements in semiconductor and telecommunications manufacturing. Despite challenges posed by the COVID-19 pandemic, which led to temporary production suspensions, the market continues to evolve with strategic investments and technological advancements. Companies are focusing on expanding their facilities and enhancing their capabilities to meet the growing demand for advanced electronic products across various sectors, including networking, 5G, and aerospace.

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Global Electronic Contract Assembly Market Size - Table of Contents

  1. 1. MARKET INSIGHTS

    1. 1.1 Market Overview

    2. 1.2 Industry Value Chain Analysis

    3. 1.3 Industry Attractiveness - Porter's Five Force Analysis

      1. 1.3.1 Bargaining Power of Suppliers

      2. 1.3.2 Bargaining Power of Buyers

      3. 1.3.3 Threat of New Entrants

      4. 1.3.4 Threat of Substitute Products

      5. 1.3.5 Intensity of Competitive Rivalry

  2. 2. MARKET SEGMENTATION

    1. 2.1 Type of Activity

      1. 2.1.1 PCB Assembly Services

      2. 2.1.2 Cable/Harness Assembly Services

      3. 2.1.3 Membrane/Keypad Switch Assembly Services

    2. 2.2 Application

      1. 2.2.1 Healthcare

      2. 2.2.2 Automotive

      3. 2.2.3 Industrial

      4. 2.2.4 IT and Telecom

      5. 2.2.5 Other Applications

    3. 2.3 Geography

      1. 2.3.1 North America

        1. 2.3.1.1 United States

        2. 2.3.1.2 Canada

      2. 2.3.2 Europe

        1. 2.3.2.1 United Kingdom

        2. 2.3.2.2 Germany

        3. 2.3.2.3 France

        4. 2.3.2.4 Rest of Europe

      3. 2.3.3 Asia Pacific

        1. 2.3.3.1 China

        2. 2.3.3.2 Japan

        3. 2.3.3.3 India

        4. 2.3.3.4 Rest of Asia Pacific

      4. 2.3.4 Latin America

      5. 2.3.5 Middle East and Africa

Global Electronic Contract Assembly Market Size FAQs

The Global Electronic Contract Assembly Market is projected to register a CAGR of 9.20% during the forecast period (2024-2029)

ATL Technology, Compulink Cable Assemblies Inc., Connect Group NV, Leoni Special Cables Ltd and Amphenol Interconnect Products Corp. (AIPC) are the major companies operating in the Global Electronic Contract Assembly Market.

Electronic Contract Assembly Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)