The global EMS and ODM market were valued at USD 574.10 Billion in 2020 and is expected to reach USD 800.19 Billion by year 2028, at a CAGR of 4.26 %. The study covers the in-depth analysis of ODM (Original Design manufacturer) and EMS (Electronic Manufacturing services) and the challenges faced by them. An original design manufacturer (ODM) is a company which designs and manufactures products according to the specifications given by other firm who ultimately brands it for sale. The ODMs are in charge of research and development and has the capability to sell the product on their own, to other buyers or even as a “White label” (product sold under several names). For instance, consumer electronics such as chargers and mobile cases are examples for ODM-created products. In the recent years, ODMs have rapidly grown and most of them can handle production for multiple clients adequately, often providing a large chunk of overall production. On the other hand, EMS (Electronic manufacturing services) are contract manufacturers which create an electronic component, right from the beginning (design) to manufacturing, testing, distribution of the final approved product.
It is further responsible for repairing the products they created for OEMs (Original Equipment Manufacturer- a company which designs and manufactures electronic products according to buyer’s specifications). Apart from the manufacturing related services, the EMS provider (also known as electronic contract manufacturing) also offers support in services such as shipping management, procurement assistance for obtaining additional components and providing customer services for the products they have created. Proximity to markets, low labor inputs, growing saturation in PC outsourcing, growing impetus in notebook PC manufacturing, a more diverse product mix and end markets are some of the key factors propelling the market growth in the industry. However associated challenges for the ODMs and EMS such as non- commoditized market which primarily focus on technical aspects, uncertain demand, complex global supply chain, sustainability of the product are major hindrance for market growth during the years 2019-2028.
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Key participants in the study include Hon Hai industry, Pegatron, Flex, Wistron, Sanmina, Pegatron,Quanta Computer ,Compal Electronics, Inventec.
Further key findings from the report suggest
- Currently ODMs are developing faster in more matured sectors such as consumer electronics and telecommunication compared to specialized sectors such as defense, automobile and industrial sector. In comparison to EMS, OEM (Original Equipment Manufacturer) is less likely to opt for ODM for contract manufacturing because OEMs have less control over IP (Intellectual protection) rights, designs of control boards, PCBs etc. Thus, ODMs are likely to become possible competitors to OEMs in the future.
- ODMs are mostly preferred by SME (small and medium size enterprises) and startup OEMs who have less budget as ODMs have their own design template.
- Many consumer electronic products are manufactured in China because of easy availability of raw materials, quality, speed, low maintenance costs. Cities such as Shenzhen is becoming a major industrial hub attracting popular consumer electronic companies such as Apple.
- Nowadays EMS has started to embrace non-traditional industries such as industrial, medical, consumer electronics. Further they are seen to provide design services in electrical and software design assistance as well.
- Global competition and new innovations are forcing the companies to cut down on costs. Further, companies are forced to produce goods as per the fast-changing consumer preferences. In addition to this, uncertain demand, complex global supply chain, sustainability of the product are few challenges faced by the EMS these days.
- Foxconn is the leading EMS provider in the world which accounts for more than 50% of the EMS revenue.
- Asia Pacific region accounts for 36.5% of the total market share. Taiwan and China are two key players in the OMS and EDM market. 75% of the global EMS market is held by Taiwanese companies. Out of the top four EMS providers in the world, Pegatron, Hon Hai (Foxconn), Wistron, and New Kinpo are based in Taiwan whereas Universal Scientific industrial company is the only Chinese company making it to top ten.
- The top 50 EMS have surpassed USD 300 billion in sales.
- Consumer devices such as mobile phones, digital cameras are the largest segment for the EMS market which account for 39.5% of the total revenue. It is followed by computers, primarily comprising of mobile PCs and desktops, holding a total share of 36.8% EMS revenue.
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Rapid developments in the manufacturing sector and equipment, robust growth in the building and construction sector, high adoption for eco-friendly materials in constructions and increasing demand for smart buildings and smart homes are boosting market growth. Steady increase in the disposable income across the globe, improvements in the standard of living, increasing number of redevelopment plans and high demand for aesthetic look and posh homes are further fueling market growth. In addition, increasing R&D investments, and government schemes to support manufacturing and construction industry are fueling growth of the global EMS and ODM market.
For the purpose of this report, Reports and Data has segmented the global EMS and ODM market on the basis of manufacturers, application and region:
Manufacturers (Revenue, USD Million; 2020–2028)
- Hon Hai industry
- Quanta Computer
- Compal Electronics
Applications (Revenue, USD Million; 2020–2028
- Consumer devices
- Automobile industries
- Servers and Storage
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Detailed Regional Analysis Covers:
- North America (U.S., Canada, Mexico)
- Europe (U.K., Italy, Germany, France, Rest of Europe)
- Asia Pacific (India, Japan, China, South Korea, Australia, Rest of APAC)
- Latin America (Chile, Brazil, Argentina, Rest of Latin America)
- Middle East & Africa (Saudi Arabia, U.A.E., South Africa, Rest of MEA)
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