Asia Pacific Electronic Manufacturing System (EMS) Market Outlook to 2030

Asia Pacific Electronic Manufacturing System (EMS) Market Overview

The Asia Pacific EMS market was valued at USD 180 billion. This growth has been driven by the regions expanding consumer electronics sector, automotive industry, and increased demand for telecommunications infrastructure. The EMS industry benefits from lower production costs and access to a skilled workforce in countries like China, India, and Vietnam.

Leading EMS providers in the Asia Pacific region include Hon Hai Precision Industry (Foxconn), Flex Ltd., Pegatron Corporation, Wistron Corporation, and Jabil Inc. These companies dominate the industry with their large-scale production capabilities and established relationships with global technology firms. Their operations span various industries, including telecommunications, automotive, consumer electronics, and medical devices, making them integral to the supply chain.

In 2024, Foxconn announced a USD 200 million investment to build a new manufacturing facility in Tamil Nadu, India. The new plant is expected to produce electronic components for smartphones and EVs, contributing significantly to Indias EMS market. The expansion is aligned with the Indian government's push for increased local production under its PLI scheme, further bolstering the countrys position as a key EMS hub.

China remains the dominant player in the Asia Pacific EMS sector, accounted the highest market share in 2023. This dominance is attributed to the countrys robust manufacturing infrastructure and significant investments in R&D. Cities such as Shenzhen, which is home to numerous technology and manufacturing firms, play a central role in the electronics manufacturing supply chain. Additionally, Indias Bengaluru is emerging as a key EMS hub, driven by government incentives and foreign investment.

Asia Pacific Electronic Manufacturing System (EMS) Market Segmentation

The Asia Pacific Electronic Manufacturing System (EMS) market is segmented into various factors such as product type, End-user industry and region etc.

By Product Type: The market is segmented by product type into consumer electronics, automotive electronics, and telecommunications equipment. In 2023, consumer electronics accounted for more than one-third of the market share, driven by the continuous demand for smartphones, laptops, and smart home devices. The segments dominance is supported by the rapid adoption of 5G, AI-driven devices, and the increased penetration of IoT technologies in daily life.

By End-Use Industry: The market is further segmented by end-use industry into automotive, telecommunications, and medical devices. The automotive segments dominance can be attributed to the growing demand for electronic components in EVs and connected cars. Countries such as China and Japan have invested heavily in developing their EV infrastructure, which is propelling the demand for EMS solutions in the automotive sector.

By Region: Geographically, the market is segmented into China, South Korea, Japan, India, Australia and rest of APAC. China holds the dominant position in the market due to its well-established manufacturing infrastructure, extensive supply chain, and strong government support through initiatives like "Made in China 2025." Cities like Shenzhen are central to global electronics production.

Asia Pacific Electronic Manufacturing System (EMS) Market Competitive Landscape

• Pegatron's New Facility in Vietnam
  In 2024, Pegatron completed the construction of a new EMS facility in Vietnam, with an investment of USD 1 billion. The facility will manufacture components for consumer electronics and automotive electronics, capitalizing on Vietnams growing reputation as a cost-effective alternative to China for electronics manufacturing. This expansion is expected to add USD 3 billion to Pegatron's annual revenue by 2026.
• Jabils AI-Powered Manufacturing Expansion
  Jabil Inc. implemented AI-powered automation systems in its manufacturing facilities in China and South Korea in 2024. This new technology is expected to increase production efficiency by 30%, reducing operational costs by USD 500 million annually. The integration of AI into EMS processes positions Jabil as a leader in innovative and cost-effective manufacturing solutions in the Asia Pacific region.

Asia Pacific Electronic Manufacturing System (EMS) Industry Analysis

Growth Drivers

• Rise in Consumer Electronics Demand: The production of smartphones, laptops, and tablets reached over 1.8 billion units across China and India, driven by increased digital adoption. This high production volume requires extensive contract manufacturing services, pushing the EMS market forward. Countries like China have emerged as leading production hubs, with the city of Shenzhen alone contributing over USD 200 billion to the EMS sector annually.
• Expansion of 5G Infrastructure: The rollout of 5G networks across the Asia Pacific region has boosted the need for advanced telecommunications equipment. China, South Korea, and Japan collectively invested heavily in 5G infrastructure, accelerating the deployment of EMS services for manufacturing network components such as routers, modems, and base stations. This demand for telecommunications equipment manufacturing is creating new opportunities for EMS providers.
• Growth of Medical Device Manufacturing: The Asia Pacific region has witnessed a surge in the demand for medical devices, especially after the COVID-19 pandemic. In 2024, the production of ventilators, diagnostic equipment, and wearable health devices in countries like Japan and South Korea contributed to an estimated USD 60 billion in EMS contracts. The medical device sector requires high-quality and precise manufacturing, which EMS providers in the region are equipped to deliver, making this a key growth driver.

Challenges

• Supply Chain Disruptions: The Asia Pacific EMS Industry is facing challenges from supply chain disruptions, particularly due to geopolitical tensions. In 2024, delays in the shipment of critical components such as semiconductors resulted in a production shortfall of smartphones in China. This disruption has forced manufacturers to seek alternative supply routes, but this comes at a cost, impacting the profitability of EMS providers in the region.
• Increased Competition from Emerging Markets: Countries like Vietnam and Indonesia are rapidly emerging as alternative manufacturing hubs, offering lower production costs compared to traditional leaders like China. In 2024, Vietnams EMS market grew, driven by its lower labor costs and favorable government policies. This shift is creating competition for established players in the region, forcing them to reevaluate their production strategies to maintain their market share.

Government Initiatives

• Indias Production Linked Incentive (PLI) Scheme: The PLI scheme, launched in April 2020, is designed to incentivize large-scale electronics manufacturing in India. As of mid-2024, the scheme has generated substantial investment and production output. By June 2024, incremental investments under the PLI scheme reached approximately 8,390 crores (around USD 1.1 billion), contributing to a total production value of 5.14 lakh crores (about USD 62 billion) in electronics manufacturing.
• South Koreas Green New Deal
  South Koreas 2024 budget included USD 8 billion earmarked for the development of green and sustainable manufacturing processes, focusing on the EMS industry. This initiative incentivizes EMS companies to adopt energy-efficient practices and reduce carbon emissions. South Korean EMS providers are now integrating renewable energy solutions into their production processes, aiming to produce 5 million green-certified electronics devices annually by 2026.

Asia Pacific EMS Market Future Outlook

The Asia Pacific EMS market is projected to grow exponentially, driven by rapid advancements in 5G infrastructure, electric vehicles, and the Internet of Things (IoT). The region's focus on innovation, coupled with government incentives for domestic manufacturing, will continue to bolster market growth.

Future Trends

• Expansion of Advanced Manufacturing Technologies: EMS providers in the Asia Pacific region will increasingly adopt advanced manufacturing technologies such as AI, machine learning, and robotics. The integration of AI-powered automation systems will reduce production costs across the region, improving operational efficiency and driving market growth. This trend will be particularly prominent in countries like China and Japan, where investments in Industry 4.0 technologies are accelerating.
• Increased Localization of Manufacturing: In response to supply chain disruptions and geopolitical tensions, companies will shift towards localizing their production facilities in the Asia Pacific region. Major EMS providers will have established more localized manufacturing hubs in countries like Vietnam, India, and Indonesia, reducing dependency on China. This shift will add more investment to the EMS market along with government incentives.