Electronic Contract Assembly Market Research Report and Outlook by 2028

The electronic contract assembly sector is anticipated to achieve a market value of US$ 251,637.62 million by 2028, with a compound annual growth rate (CAGR) of 10.3% from 2023 to 2028.

Electronic contract assembly is vital in the production and assembly of electronic components and systems. Companies that operate within the electronic contract assembly market offer a variety of services, including surface mount technology (SMT) assembly, through-hole assembly, cable and wire harness assembly, electromechanical assembly, system integration, testing and inspection, as well as final product packaging. This market serves multiple industries, including healthcare, automotive, aerospace, consumer electronics, and telecommunications. The rising complexity and miniaturization of electronic devices are significant factors driving the electronic contract assembly market. As devices become more sophisticated, they necessitate intricate and precise assembly processes that can be difficult for smaller firms to manage internally. By outsourcing to electronic contract assembly providers, major companies like Samsung, Intel, and Microsoft can leverage specialized knowledge, advanced machinery, and economies of scale.

The rapid advancements in telecommunication networks are leading to increased speeds, enhanced reliability, and reduced latency. Key industry players are actively working to improve 5G infrastructure in emerging markets. For example, in August 2021, Indosat Ooredoo, a telecommunications provider in Indonesia, partnered with Ericsson to roll out commercial 5G services in Jakarta. Likewise, in February 2023, Siemens introduced its first industry-ready 5G routers in India. These commercial 5G networks support a wide range of applications, including intralogistics, autonomous machinery, industrial edge computing, remote diagnostics, augmented reality, assisted work, wireless backhaul, and mobile equipment. The 5G telecommunication framework is essential for enabling applications such as intelligent automation, smart manufacturing, and connected mobility. Furthermore, the expansion of 5G infrastructure is driving the demand for new smartphones. The smartphone manufacturing sector is increasingly outsourcing electronic manufacturing contracts within the electronic contract assembly market. Consequently, the growing prevalence of smartphones, smart manufacturing, and intelligent automation, fueled by the expanding 5G network, is expected to create significant opportunities within the electronic contract assembly market.

Effects of the COVID-19 Pandemic on the Electronic Contract Assembly Market

• In the first quarter of 2020, the COVID-19 pandemic had a profound impact on two major markets in the Asia-Pacific region?India and China?significantly disrupting the semiconductor and IT & telecom sectors. Lockdowns and temporary halts in industrial operations across key countries in APAC caused significant supply chain disruptions for various raw materials and products due to transportation issues. For instance, in June 2021, King Yuan Electronics Co., one of the largest chip-testing firms globally, temporarily ceased operations in Taiwan.
• By the fourth quarter of 2020, businesses in the semiconductor, electronics, and IT & telecom sectors began to recover substantially from the challenges faced earlier in the year. For example, in December 2022, the telecom industry in India was poised to launch 5G services, aiming to attract US$ 0.19 billion in investments in 2023. The Indian telecom sector is undergoing a transformation, enhancing connectivity through 5G services while also reducing operational costs. Major telecom companies, including Ericsson and Nokia, have increased their manufacturing efforts in India. With the introduction of 5G services, internet usage is expected to rise, thereby boosting the adoption of electronic devices in the electronic contract assembly market.
• In 2022, Taiwan Semiconductor Manufacturing Co. announced plans for a second chip manufacturing facility in Arizona, increasing its investment in the state from US$ 12 billion to US$ 40 billion. This expansion is set to enhance the production of electronic devices, such as diodes, transistors, and integrated circuits, contributing to the growth of the electronic contract assembly market.

As a result, India is becoming a prominent hub for electronic contract assembly and manufacturing services. Numerous market participants are expanding their operations in India. In April 2023, Foxconn, a leading electronics contract manufacturer, invested US$ 300 million to establish a new electronics manufacturing facility in Telangana, India. Similarly, in February 2023, Luxshare Precision Industry Co., a contract manufacturer for Apple Inc., set up operations in Tamil Nadu, India, marking the third Apple contract manufacturer to expand its footprint outside of China. Following the COVID-19 pandemic, Apple is shifting a significant portion of its production away from China. These developments indicate that the electronic contract assembly market in India is experiencing substantial growth.

Key players in the electronic contract assembly market include Creation Technologies LP, Precision Manufacturing Company Inc, Benchmark Electronics Inc, Celestica Inc, Compal Electronics Inc, Fabrinet Co Ltd, Flex Ltd, Matric Group Inc, Jabil Inc, and Filtronic Plc.