Electronic Manufacturing Services may touch $152 Bn by 2025: ELCINA report

New Delhi, Dec 30 (KNN) The Electronic Manufacturing Services (EMS) has the potential to grow from less than 3 per cent of the global industry to about 14 per cent  within 5 years, said a report by ELCINA Electronic Industries Association of India.

ELCINA, with research support from Feedback Advisory, conducted an in depth study of the Electronic Manufacturing Services (EMS) sector which consists of two sub-segments viz. PCB Assembly ie. Mounting components on bare PCB’s and Box-Build services involving assembly of finished equipment and their aggregates.

''Globally, the EMS sector was valued at 832 billion dollars in 2019 and estimated to grow to 1055 billion dollars by 2025. ELCINA predicts that the Indian EMS industry will gallop from 23.5 billion dollars in 2019-20 to 152 billion dollars by 2025. This effectively means that it has the potential to grow from <3 per cent of the global industry to about 14 per cent within 5 years,'' ELCINA said in its report.

The global EMS industry has grown very quickly during the last 15-20 years as it has expanded the scope of its activities for the Electronic Systems Design & Manufacturing (ESDM) sector. From a small share of 10-15 per cent in the ESDM industry, EMS now straddles in excess of 40-45 per cent of its value.

''In addition to PCBA and pure assembly services, EMS has now expanded to include research & development, supply chain management, global distribution, logistics, customer support and even warranty repairs. There has been a complete transformation of the role of EMS in the ESDM industry globally,'' the report said.

Secretary Ministry of Electronics & IT, Government of India, Ajay Sawhney, while releasing the report, reinforced the need to manufacture PCB assemblies within the country and reduce import dependence.

''There was plenty of opportunity for utilising the existing Schemes of NPE 2019 and additional schemes which were being promoted for other sectors, such as medical electronics, defence and aerospace which had created huge demand for electronics,'' he added.

Sawhney also mentioned that there was a huge opportunity in products such as Servers, Laptops, Tablets etc. and encouraged industry to take up these high value and large volume products. He also informed that government was keen to support expansion of the components eco-system in the country and certain follow up schemes were in the works to enable participation by more domestic companies including the Medium and Small enterprises.

Sanjiv Narayan, Chairman of the ELCINA EMS Task Force & Founder Director SGS Tekniks Manufacturing, thanked the Secretary, Jt Secretary Saurabh Gaur and all the Task Force members for their support and underlined the importance of support to EMS sector for expanding its outreach into export markets, which were largely controlled by China and Vietnam. The extent of this opportunity was brought out by the fact that China exported 685 billion dollars of electronics to the world.

According to the report, India had set a target of 100 billion dollars of exports of mobiles alone by 2025 which was possible with the support of the PLI scheme. This would mean that India would serve 25 per cent of the global mobile market which was estimated to be valued at 415 billion dollars in 2025. Similar support of 4-5 per cent was required for non-mobile EMS exports which would enable India to make a mark in the world market.

The report further said that the Indian EMS industry has a vast spectrum of players ranging from Global MNC’s, Large Indian EMS players and a very large number of MSME Players. It is estimated that there are almost 700 EMS players in India including 100 global companies and 600 domestic. A substantial share of production is done by 6 large global MNC Firms while among the balance 90+ MNCs, few are large while most are of medium size. Among the remaining approximately 600 domestic companies, there are 15 large ones, 60-65 medium size companies and the balance 500 are small/micro in size.

''Most Indian firms are in pure play EMS services and only a handful of firms offer the complete Design Engineering Services & Manufacturing (ODM) to OEMs’,'' the report further read.

Printed Circuit Board Assemblies are at the core of every electronic device. And constitute anywhere from 40-50 per cent of the BOM of the device. To develop India as an electronics manufacturing hub, it is crucial that we expand the manufacturing ecosystem for EMS and PCBA’s in India.