44 EMS Industry Statistics, Trends & Analysis

The Electronics Manufacturing Services (EMS) industry includes companies that design, manufacture, distribute, and repair electronic assemblies and components for OEMs (original equipment manufacturers). Because many of today’s consumer electronics are built in China due to the cost advantages and the availability of materials, a significant portion of the EMS industry is located in southeast Asia.

This industry is relatively new, taking off in the late 1970s thanks to the establishment of Solectron. Before this company innovator, most of the electronics manufacturing in the world were managed through large-scale product runs using in-house assembly techniques. By offering more flexibility, there were fewer HR issues, allowing SMBs to afford limited runs. That created opportunities to respond to sudden spikes of demand without creating higher cost values.

There are currently four tiers available in the EMS industry, with companies divided into segments based on their revenues. Tier 1 companies earn more than $5 billion, while Tier 2 organizations must make at least $500 million. Organizations are given a Tier 3 classification when they make at least $100 million, and Tier 4 covers anyone making less than that.

Essential EMS Industry Statistics

#1. The total available North American electronics assembly market in 2017 was valued at $294 billion. Over 72% of the earnings came from in-house assembly OEM opportunities. (IPC Global)

#2. The rate of sales growth for participants in the EMS industry in North America has increased each year since 2014, reaching a 10.5% increase in 2017. The number of order backlogs as a percentage of sales has also grown steadily during that time. (IPC Global)

#3. 37% of the aggregate sales in the North American market was in industry electronics, making it the largest vertical market for industry participants during the year. (IPC Global)

#4. Germany has also seen an impressive expansion of its EMS industry in recent years, achieving a 12.2% growth rate when monetary figures are calculated in the U.S. dollar. Every other company participating in this industry saw double-digit growth rates in 2017. (in4ma)

#5. Employment in the German sector of the EMS industry grew at 4.2%, with about 1,400 new jobs anticipated for 2018. (in4ma)

#6. Order intake grew at 22% for the EMS industry in 2018, which was significantly higher than the 11% growth experienced in 2017. Revenues representing a B2B factor came in at a ratio of 1.22, creating a coverage backlog of 209 working days. (in4ma)

#7. About 10% of the active companies in Germany reported a decline in revenues against the previous year, due primarily to allocation problems that they had with some specific components. (in4ma)

#8. Bookings were lower than revenues in Switzerland at 0.90, which created a reduction in the order backlog for their EMS industry. Companies still achieved a 10.5% rate of growth, with revenues increasing by 11.7%. Employment even grew by more than 11% in 2018 after seeing a 3.6% decline in the year before. (in4ma)

#9. Global EMS companies like Jabil, Flex, and Foxconn generate more than 30% of the EMS revenues that occur in Europe each year. (in4ma)

#10. EMS revenue growth in Austria stood at 2.6% in 2018, with just 11 companies representing 50% of the earnings for the year. Although that growth was minimal compared to the rest of Europe, it expanded upon the record level of earnings that came through the year before. Order intake exceeded revenues by 15%. (in4ma)

#11. Hiring in Austria for the EMS industry remained strong as well, with 5.6% more full-time opportunities available when compared to the previous year. (in4ma)

#12. An automation boom in the EMS industry has left to a 30% increase in the number of industrial robot units sold to keep up with production demands. There are now over 2 million robots at work in the industry, with over 381,000 of them sold in the past 12 months. (International Federation of Robotics)

#13. The emphasis on automation within the EMS industry means that there could be another 2 million robots sold in the next 24 months. (International Federation of Robotics)

#14. Manufacturers contributed over $2.38 trillion to the U.S. economy in the past 12 months, including revenues generated by the EMS industry. For every $1 that companies spend on manufacturing processes, another $1.82 is added to the overall value of the national economy. (National Association of Manufacturers)

#15. The majority of manufacturers in the United States are very small. There were almost 250,000 active businesses in this space, including figures from the EMS industry, but only 3,837 were considered to be large. 75% of the agencies employ fewer than 20 people. (National Association of Manufacturers)

#16. 8.5% of U.S. workers are employed in the manufacturing sector in the United States. Since 2009, companies have added over 1.3 million workers, with two-thirds of them employed in the production of durable goods like electronics. (National Association of Manufacturers)

#17. Manufacturers in the United States offer one of the highest percentages of workers who qualify for employer-offered health benefits. 92% of employees are eligible for benefits in 2018, which is much higher than the 79% average when looking at all industries. About 82% of eligible employees use the plans which are available to them. (Kaiser Family Foundation)

#18. The average wage of a manufacturing employee in the United States is more than $84,000 per year, although that number reflects benefits in addition to the paycheck. Non-agricultural workers average about $66,000 per year. Most workers earn about $27 per hour. (National Association of Manufacturers)

#19. Exports from the manufacturing sector in the United States have quadrupled over the past three decades. In 1990, there were $329.5 billion in manufactured goods sent to the world. In 2018, it was just under $1.4 trillion – despite the fact that there was a stronger dollar in place. (U.S. Department of Commerce)

#20. Foreign direct investment in the manufacturing sectors in the United States exceeded $1.6 trillion, setting a record in 2017 for the amount added. (National Association of Manufacturers)

#21. The revenues from circuit board and electronic component manufacturing in the United States is more than $40 billion per year. (Creation Tech)

#22. The global EMS market is now responsible for almost 40% of all assembly tasks that occur. There was a record 225 million placements done in the Vancouver BU. (Creation Tech)

#23. There are some SMT machines operating in the EMS industry today that can place over 136,000 components in an hour. A Siemens SMT line can place a component as small as 0.4mm by 0.2mm on a board, which is so small that you would need to have a microscope to see the process. (Creation Tech)

#24. Manufacturing facilities that perform PCB inspections or rework must have at least 1,000 lumens of brightness with their lighting to ensure the quality assurance work is accurately performed. LED lighting is the preferred option since the bulbs last longer and generate less heat when creating the necessary levels of illumination. (Creation Tech)

#25. Foxconn builds over 540,000 iPhone units for Apple every day as part of their work in the EMS industry. (Creation Tech)

#26. 40% of a vehicle’s component costs in 2015 were directly related to the electronics that were part of the manufacturing process. (Creation Tech)

#27. The expected value of the global EMS industry in 2019 is $621 billion, which is more than $160 billion more than what it was in 2014. (Creation Tech)

#28. Women make up about 27% of the full-time employees that you can find in the EMS industry today. (Creation Tech)

#29. Up to 80% of the production costs that active firms in the EMS industry face each year come from decisions that were made during the design phase of a project. (Creation Tech)

#30. Over 30% of the electronics manufacturing activities which occur in Mexico pertain to the Information Technology industry. Factories there are making memory chips, CPUs, network switches computers, and routers. Another 30% involves consumer electronics, and there are facilities that produce LCD panels, circuit boards, and communications equipment. (NAPS International)

#31. Although the overall GDP in Mexico is growing slowly, the tech produced in the country is growing at an annual rate of 20%. There is no slowdown expected in the EMS sector until at least 2026. This impressive cycle has made the country the sixth-largest technology producer in the world today. (NAPS International)

#32. Over $70 billion in technology products are exported to the United States every year, which is second only to China in the amount that Americans purchase. (NAPS International)

#33. Mexican labor in the EMS industry costs about 20% less than what it does in China today, even though 15 years ago, it was 58% more than their competitor in Asia. When you add in the fact that it is also skilled and educated, that makes it a useful and modern manufacturing environment. (NAPS International)

#34. The United Nations ranked Mexico recently as being the sixth-best place in the world for foreign direct investment, with much of the emphasis on the EMS industry in the country. (NAPS International)

#35. The affiliates of foreign multinational enterprises employed nearly 2.5 million manufacturing workers in the United States in 2016. That represents about 20% of the total employment in this sector. Computer and electronic products received a boost of 152,900 positions. (National Association of Manufacturers)

#36. 64% of the private research and development activities that happen in the United States come from manufacturers. Although pharmaceuticals account for over 30% of all revenues spent in this area, computers and electronics were significant contributors as well. (National Association of Manufacturers)

#37. Over 30% of the energy that the United States consumes each year goes directly to manufacturing processes. That figure represents about 32.3 quadrillion BTU of energy. (National Association of Manufacturers)

#38. Almost 70% of the manufacturers in the United States are structured as being a pass-through entity. When sole proprietorships and partnerships are added to S-Corps, then that figure rises to 83.4%. (HSV Chamber)

#39. Almost 50% of the manufactured goods exports from the United States went to countries which have a free-trade agreement. Over $674 billion in goods were sent to these nations in 2014, representing 48.1% of the total market for the year. (HSV Chamber)

#40. Between 2000-2013, the world trade in manufactured goods more than doubled, going from $4.8 trillion to $12.2 trillion. About 34% of worldwide trading opportunities include products that may include EMS sector products. (HSV Chamber)

#41. If manufacturing in the United States by itself were classified as a nation, then it would be the ninth-largest economy in the world. (HSV Chamber)

#42. One of the most significant challenges presented to the American EMS industry is that agencies face a 20% structure cost burden when compared to their global competitors. That means the cost of every domestic product is higher, placing companies at a real disadvantage when trying to sell overseas. (The Manufacturing Institute)

#43. Between 2005-2010, the total amount in local and state taxes paid by EMS manufacturers rose by 31%. (The Manufacturing Institute)

#44. The rate of manufacturing sector profitability in the United states averaged 12.5% between 1980 to 2011, although there were steep drops in the rate of return on equity in 1992 and 2001. (The Manufacturing Institute)

EMS Industry Trends and Analysis

The inherent economic benefits of offshoring or outsourcing are different for every company in the EMS industry. There is also no denying the fact that manufacturing through these options has seen a steady trend upward over the past 20 years. There are clear benefits to consider with reduced overhead, lower labor costs, production efficiencies, and faster product introductions.

That is why we will continue to see an increase in interest from OEMs who want to collaborate with EMS industry participants to continue the cycles of product development.

There are three key trends that will continue to see investments in the coming years: product design outsourcing, manufacturing integration, and the development of strategic partnerships. The goal for the industry is to create a single stop for customers because competencies in design, engineering, and manufacturing become available with these efforts.

The companies who undertake outsourcing and become more responsive with their services are the ones that will see the most success in the future EMS industry. In-house production will not go away entirely, but it will be those who use big data and form strategic partnerships that have the potential for the most success.