Market Trends of Global Electronic Contract Assembly Industry
This section covers the major market trends shaping the Electronic Contract Assembly Market according to our research experts:
Consumer Electronics to Drive the Market Growth
- Communications and computer products are expected to be the leading segments driving the most significant growth in the electronics industry. Outsourcing processes has become a critical element in keeping the electronics industry expanding and handling costs to the margin each year, a leading factor in stimulating consumer demand.
- With the emergence of the internet of things (IoT), there have been many new opportunities for consumer electronics manufacturers. Wearable devices, such as smartwatches, incorporate chips and flexible sensors. Breakthrough in designing these devices and manufacturing technology may have a significant impact on the PCB market. The amount of systems connected over the internet is also expanding in multiple regions over the past decade.
- The leading OEMs, such as Apple, also employ electronic contract manufacturing from Foxconn, which employs approximately 350,000 people and produces about half of the world's iPhones. Before the fall release of a new iPhone in the busy summer months, the factory produces around 500,000 phones a day.
- Furthermore, demand for high-performance, ultra-thin, and light displays with interactive, quick reacting interfaces pushes material requirements to the edge. These prerequisites drive new advances in display materials technology for various applications, from ITO replacements for touch screens to display innovations for flexible devices.
- In the healthcare prospect, the concept of wearables (wrist and body-worn) calls for flexible printed electronics, while remote monitoring (home healthcare) calls for more connected devices. These trends again impact the design controls and provide an opportunity for the contract assembly companies.
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Asia Pacific to Witness Highest Growth
- Housing a significant number of OEMs, the region is estimated to be a substantial market for contract assembly during the forecast period. The regions, including China, India, and Japan, are likely to drive the demand, considering the government's technology development, especially in the smart devices and smart healthcare in Japan.
- The domestic demand for consumer electronics, especially in the home automation space, increased quickly. In China, the consumer electronics market's market is estimated to witness growth by three times its current size, with the critical smart products, according to a well-known home appliance maker, TCL.
- China is one of the significant markets globally, owing to its strong position in the semiconductor, consumer electronics, and other telecommunications devices and equipment manufacturing industries.
- The country currently has about 60-70% of the world's electronics production and assembly capacity. According to the Semiconductor Industry Association, the country's semiconductor sales revenue grew from USD 82.4 billion (2015) to USD 143.7 billion (2019). The country is also leading the world in 5G technology, with full network coverage planned in 50 cities in late-2020.
- The companies in the region are also making significant achievements in developing technologies, such as Flex PCB and Flex rigid PCB. In the continuous upgrades of PCB manufacturing technology, China experiences a stable and optimized product structure. Furthermore, a series of newly established strategic industries in AI, Big Data, and cloud computing belong to advanced manufacturing, leading to the dependence on assembly players.
- However, the pandemic outbreak has made players in the region comply with the nationwide lockdown. As of late March 2020, Foxconn and Wistron suspended production at their plants in India to reduce the spread of COVID-19. These companies are also manufacturing partners to major electronics companies.
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