NEVADA CITY, CA – In 2017, worldwide revenue for contract electronics manufacturing services increased 10.8%, resulting in combined EMS and ODM revenue of $471 billion, says New Venture Research.

Over the previous four years the CM market had been in decline, but recovered substantially in 2017, says the research firm. The CM market was sustained by strong demand for smartphones, which resulted in an increase in assembly revenue of $14 billion in 2017. Capital spending in wireless infrastructure exceeded an additional $3 billion in orders in 2017, as carriers prepare for the next‐generation 5G networks, according to NVR.

NVR expects overall combined market growth of 7.5% CAGR over the next five years.

The NVR report is based on the financial records of 41 publicly traded EMS companies and 18 publicly traded ODMs. Foxconn accounted for nearly half of all the money made by the EMS industry in 2017, and EMS companies accounted for approximately 78% of the total. Only four of the public EMS firms and two ODMs lost money last year.

Pegatron ranked second in net income ($527 million) for EMS companies, followed by Flex ($320 million), while Quanta Computer, Delta Electronics, and Qisda ranked highest in earnings for ODMs.

Enterprise LAN system assembly was strong last year, as cloud computing requires distributed data centers worldwide.

Plant closures and openings were insignificant in 2017, as most companies appear to have right‐sized operations or closed facilities resulting from completed acquisitions.

Communications and computer products will continue to drive the largest growth in the electronics industry. In 2022, the total industry is expected to reach $1.7 trillion in annual assembly value, as consumption and replacement of electronic products continue and new products stimulate demand. Outsourcing has become a critical element keeping the electronics assembly industry expanding and driving costs down each year. The trend to move price‐sensitive manufacturing to low‐cost regions has subsided but will continue to impact the industry for all suppliers in the foreseeable future, according to NVR.

Register now for PCB WEST, the leading trade show for the printed circuit design and electronics manufacturing industry! Coming Sept. 11-13 to the Santa Clara Convention Center.

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