Electronic Manufacturing Services For Industrial Device Market Size & Share Analysis - Growth Trends and Forecast (2026 - 2031)

Global Electronic Manufacturing Services For Industrial Device Market Trends and Insights

OEM Cost-Reduction Imperatives Sustain Outsourcing Momentum

OEMs in industrial automation, process control, and instrumentation have accelerated divestitures of in-house SMT lines to free capital for predictive-maintenance software and digital-twin development. Sanmina noted that 63% of its 2025 customer wins originated from OEMs shuttering internal lines, a 22-point rise over 2023^{[2]Source: Sanmina Corporation, “Form 10-K Annual Report 2025,” sanmina.com}. Mid-tier OEMs between USD 500 million and USD 2 billion revenue experience the sharpest return-on-capital drag from captive fabrication, pushing them toward bundled EMS agreements that fix procurement, assembly, test, and logistics costs. European energy price inflation lifted the total cost of ownership for internal assembly by 18% between 2024 and 2025, reinforcing outsourcing decisions^{[3]Source: Financial Times, “Europe Energy Costs Manufacturing Impact,” ft.com}. Although EMS partners now manage more of the physical build, OEMs maintain firmware and embedded-software control by deploying secure enclaves inside EMS facilities to protect intellectual property.

Growth of Industrial Automation and IIoT Hardware

Predictive-maintenance programs in automotive, aerospace, and heavy-equipment plants have accelerated demand for ruggedized gateways and controllers that meet extended-temperature and vibration benchmarks. Each gateway requires conformal-coated PCB assemblies and vibration-resistant solder joints, prompting EMS providers to upgrade reflow ovens, X-ray inspection, and selective-soldering lines. Flex reported that its industrial segment grew 19% year-over-year in Q3 2025, with IIoT hardware contributing 41% of that gain. The need to encapsulate power supplies, cooling modules, and I/O interfaces inside IP65 enclosures is lifting box-build revenue. Compliance with IEC 61131-3 programmable-controller standards has become standard, pressuring smaller EMS firms to invest in certification or exit the industrial vertical.

Rising Demand for AI-Ready Edge Controllers and Gateways

Industrial OEMs are embedding inference accelerators inside programmable logic controllers for real-time anomaly detection without cloud latency. Benchmark Electronics indicated that orders for edge controllers with neural-processing units advanced 34% in H1 2025, primarily from semiconductor-equipment and pharmaceutical customers. These designs require flip-chip bonding and through-silicon vias, specialized processes that only about 18% of EMS providers could supply as of early 2025. The capital burden is elevating entry barriers, while the EU AI Act imposes rigorous traceability of training data for safety-critical applications, adding documentation overhead for EMS partners handling firmware integration.

Regulatory Push for Localized Supply Chains

The CHIPS and Science Act earmarks USD 39 billion in direct subsidies and USD 75 billion in loan guarantees for U.S. semiconductor and electronics capacity, with 22% dedicated to industrial electronics as of December 2025. Complementary EU initiatives incentivize EMS providers to locate final assembly within 500 km of automotive and industrial design hubs. Celestica opened a 75,000 sq ft industrial-electronics plant in Brno, Czech Republic, to skirt tariffs and pare lead times for regional OEMs. Localization shifts are fragmenting once-consolidated Asian supply chains, raising logistics complexity and inventory days outstanding.

Margin Pressure From Rising Skilled-Labor Costs

Median hourly wages for electronics-assembly technicians in the United States climbed 11% to USD 28.40 in 2025, while European rates advanced 9% to EUR 24.60 (USD 27.80). Near-shore hubs such as Mexico and Poland experience intensified competition for talent as EMS providers battle automotive and aerospace industries for the same certified labor pool. Plexus disclosed that labor costs as a share of revenue rose 140 basis points in 2025, compressing operating margins to 5.8% from 7.2% a year earlier. Automation can relieve some pressure, yet collaborative-robot payback periods often exceed 36 months, deterring smaller firms.

Volatile Semiconductor Lead Times Disrupt Production Schedules

Industrial-grade microcontroller and power-management IC lead times oscillated between 18 and 34 weeks in 2025, with allocation conflicts arising from automotive and renewable-energy surges. EMS providers boosted safety stock, but inventory days outstanding at Jabil lengthened to 68 days from 54 days in 2024. A single missing component can stall box-build lines, and smaller EMS houses without direct foundry relationships often pay 20-30% distributor premiums for expedited shipments.

Segment Analysis

By Service Type: Box-Build Momentum Reflects Brownfield IIoT Demand

PCB assembly retained a 44.92% revenue share of the Electronic Manufacturing Services for Industrial Device market in 2025. However, electromechanical box-build revenue is forecast to grow at 6.73% CAGR through 2031 as industrial clients retrofit legacy machinery with IIoT gateways, avoiding wholesale line replacements. The Electronic Manufacturing Services for Industrial Device market size tied to prototyping expanded when Venture Corporation logged a 27% rise in new-product-introduction projects during 2025, largely from industrial-robotics customers. 

The pivot toward box-build work is most visible in plants older than 15 years; Zollner noted that 58% of 2025 box-build projects involved equipment that old. Logistics services that synchronize component arrival with production have become differentiators, and test-and-development requests are climbing as regulators demand pre-certification for electronics deployed in hazardous environments. Engineering services that cut field-failure rates below 0.5% are supporting ISO 9001:2015 compliance and commanding premium margins.

Note: Segment shares of all individual segments available upon report purchase

By Business Model: Hybrid Turnkey Models Capture Design-for-Manufacturability Value

Contract manufacturing still held 60.11% of 2025 revenue, yet hybrid turnkey models are projected to book a 6.97% CAGR to 2031, outpacing traditional approaches. The Electronic Manufacturing Services for Industrial Device market size attached to turnkey engagements is expanding because OEMs seek co-design input that trims prototyping cycles and shifts tooling risk to EMS partners. Fabrinet stated that turnkey contracts comprised 41% of its industrial revenue in Q2 2025, up from 28% two years prior. 

OEMs accept risk-sharing structures where EMS suppliers co-invest in fixtures against multi-year volume commitments. ODM remains centered in Asia Pacific; Universal Scientific Industrial saw ODM revenue climb 16% in 2025, fueled by automation customers. Cybersecurity compliance under IEC 62443 further lifts turnkey demand, as EMS firms with certified secure-development lifecycles can expedite regulatory approvals.

By Manufacturing Process: Advanced Packaging Gains Traction for Edge-AI Modules

Surface-mount technology captured 53.73% of 2025 revenue, but advanced packaging and hybrid processes are set to rise at 7.13% CAGR, the fastest within the Electronic Manufacturing Services for Industrial Device market. Fine-pitch components below 0.4 mm are driving placement-equipment upgrades, while through-hole assembly persists for high-stress railway and grid-automation boards. 

Adoption of wafer-level fan-out and system-in-package designs is accelerating among EMS providers that serve semiconductor-equipment and medical-device OEMs. Wistron qualified fan-out wafer-level packaging for edge-computing modules in September 2025 to target autonomous robots and collaborative arms. Hybrid processes combining SMT, through-hole, and wire-bonding suit power-electronics boards where high-current traces and digital controls co-exist. Achieving IPC-6012 Class 3 certification for high-reliability PCBs compels smaller EMS firms to upgrade traceability systems.

Note: Segment shares of all individual segments available upon report purchase

Geography Analysis

Asia Pacific generated 55.83% of Electronic Manufacturing Services for Industrial Device market revenue in 2025 and is forecast to post a 7.57% CAGR through 2031, the fastest regional growth. India’s production-linked incentive scheme drew USD 8.3 billion in EMS pledges by December 2025, with Foxconn, Wistron, and Pegatron scaling plants in Tamil Nadu and Karnataka. Vietnam and Thailand continue to capture relocation from Guangdong and Jiangsu, trimming China’s share by 4.2 points between 2023 and 2025. Japan and South Korea focus on high-precision industrial-robotics assemblies that command premium pricing. 

North America represented roughly 22% of 2025 revenue, supported by CHIPS Act grants and OEM preferences for near-shore suppliers that shrink lead times. Mexico is the region’s growth engine, with SMT capacity in Tijuana, Guadalajara, and Monterrey expanding 18% year-over-year in 2025. The United States channels subsidies toward defense and critical-infrastructure electronics; Benchmark and Plexus expanded facilities in New Hampshire and Wisconsin to serve these verticals. Canada’s EMS base concentrates in Ontario and Quebec with aerospace and automation exposure. 

Europe held about 18% of 2025 revenue, with Poland, Czech Republic, and Romania registering double-digit EMS growth as German and French OEMs hedge against Asia-Pacific supply risk. Celestica’s Brno plant illustrates this shift. Germany remains Europe’s largest market, yet labor-cost inflation and energy volatility limit margin upside. South America and the Middle East and Africa together contribute under 5% of revenue, with growth centered in Brazil and the United Arab Emirates. Compliance with RoHS and REACH rules adds 3-5% to ownership costs for EMS suppliers serving European customers.