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North America Electronic Manufacturing Services Market Analysis

The North America Electronic Manufacturing Services Market size is estimated at USD 168.35 billion in 2024, and is expected to reach USD 218.18 billion by 2029, growing at a CAGR of 5.30% during the forecast period (2024-2029).

Companies engaged in electronic manufacturing provide a wide range of value-added services such as product designing, engineering, and manufacturing for original equipment manufacturers (OEMs), allowing them to focus primarily on R&D and other core activities like marketing and sales. Electronic manufacturing services (EMS) are also interchangeably used with a more generic term, "contract manufacturing."

With the growing proliferation of emerging technologies such as the Industrial Internet of Things (IIoT), increasing miniaturization of electronic components, and enhanced communication posed by 5G, the need for revolutionizing electronic component design and assembly has been felt for years. Also, the demand for EMS in North America has been increasing owing to the higher labor cost, forcing OEMs operating in the electronics industry to outsource manufacturing activities.

In North America, the Industrial Internet of Things (IIoT) and Industrial 4.0 are central to the new technological approaches for developing, producing, and managing the entire logistics chain, otherwise known as smart factory automation. They dominate the industrial sector trends, with machinery and devices being connected via the Internet.

As a result of such trends, the demand for advanced electronic devices/components has been growing significantly. This creates a favorable ecosystem in the market as it becomes difficult for OEMs to cover all aspects of the electric device production process, ranging from design to engineering to production. Hence, some outsource the manufacturing to EMS providers offering specialized manufacturing services.

The growing demand for electronic devices in the consumer segment is another major factor supporting the market's growth in the region. Significant demand growth makes it hard for OEMs to scale their operations quickly, considering the higher complexity of developing electronic device/component manufacturing facilities. Hence, some OEMs outsource the production activities to EMS companies.

However, factors such as higher investment required in developing electronics manufacturing facilities are among the significant challenges for the market's growth. Also, the presence of stringent industry regulations and guidelines challenges the market's growth in the region as companies must follow various local, state, federal, and foreign environmental laws and regulations for manufacturing processes, as well as the storage, treatment, discharge, emission, and disposal of hazardous waste by-products of these processes.

Also, the electronics assembly process can generate lead dust, and companies are responsible for remediating lead dust from the interior of the manufacturing facility while vacating the space. Companies must also monitor for airborne lead concentrations in the buildings and are unaware of any significant lead concentrations over the applicable OSHA or other local standards.

North America Electronic Manufacturing Services Industry Segmentation

Electronics manufacturing services are used by organizations that design, manufacture, test, distribute, and provide return and repair services for electronic components and assemblies for original equipment manufacturers (OEMs).

The North American electronic manufacturing services market is segmented by service type (electronics design and engineering, electronics assembly, electronics manufacturing, and other service types), application (consumer electronics, automotive, industrial, aerospace and defense, healthcare, IT and telecom, and other applications), and country (United States and Canada). The market sizes and forecasts are provided in terms of value (USD) for all the above segments.