Application Watch: EMS companies boost efficiency, offer reliable partnerships

Makers in China's electronics contract manufacturing sector focus on greater productivity to achieve higher quality at low cost.

China, one of the major hubs in the world offering electronics manufacturing services, continues to emphasize its comprehensive industry chain, abundant labor resource, low production cost and preferential trade policies.

Leveraging these advantages, suppliers in the sector are concentrating on strengthening capability to deliver on various quality and cost requirements. This includes being able to handle more complex PCB assembly designs, fabrication and testing to attract a bigger clientele. To realize the objective, companies have been updating their know-how and upgrading facilities through the acquisition of advanced equipment.

So far, local EMS enterprises have formed long-term and stable relationships with original brand manufacturers or OBMs. They provide the latter high-quality products at a short turnaround, as well as design and aftersales services. In this way, the former enables OBMs to focus on build-to-order and configure-to-order strategies, and meet the needs of customers worldwide.

Large China EMS suppliers turn out mainly midrange and high-end consumer electronics products. The majority, which operates on a small and medium scale, turns out entry- and midlevel selections.

These makers cover a wide range of electronics categories, including consumer and automotive electronics, computers and peripherals, and communications, medical and industrial devices and equipment. The first accounts for a sizeable share of shipments.

In future, many domestic companies are looking to adopt smart manufacturing, which is already being done by some of their foreign counterparts in China such as Foxconn. This involves the use of robotics, automatic production equipment, RFID, industrial Ethernet, and an integrated management system. Examples of the last include enterprise resource planning or ERP, manufacturing execution system or MES and distributed control system or DCS.

In 2019, the sector employing this digitalized strategy in China racked up a total production value of $157 billion, according to Sohu News. This is expected to rise by 20 percent in the months ahead.

Realignment

Most China EMS providers send between 40 and 100percent of output overseas, mainly to Europe, North America and Asia.

Exports had been rising at an annual rate of 5 to 10 percent. The trade war with the United States, however, affected businesses, with various companies reporting a decline in orders. This has prompted many to divert their attention to Europe, Asia and the Middle East instead.

Others, including some foreign EMS suppliers based in China, set up factories in neighboring hubs in Asia such as Vietnam.

Another offshoot of the conflict is mergers and acquisitions. Shanghai-based Universal Scientific or USI announced the $450 million spent to acquire the second-largest EMS manufacturer in Europe, AFG. The company is also investing to set up a new $42 million facility in Vietnam to extend its coverage globally.

In 2020 and 2021, with the easing of trade tensions, the majority in the sector is optimistic, predicting a modest 5 percent sales growth.

Interviewed supplier Shenzhen Topwell Technology Co. Ltd is upbeat and will continue to raise its output by 10 percent, anticipating exports will increase at the same rate.

China's key homegrown EMS providers include USI, Shenzhen Kaifa and 3CEMS. The first is listed with Foxconn, Pegatron, Flex, Jabil, Wistron, Sanmina, Celestica, the New Kinpo Group and Venture among the world's top 10 companies. In addition to Foxconn, some of these major players have factories in China. The other two locals are in the top 50.

The EMS total market is projected to hit $551 billion in 2021 at a CAGR of 5.3 percent from 2016 to 2021, according to New Venture Research.

China production capability

EMS providers in China have facilities for DIP and SMT assembly, and offer partial and full turnkey services.

The main production equipment used in SMT include silkscreen printing and wave-soldering machines, reflow ovens and automatic assembly equipment. These can process components in sizes of 01005, 0201, 0402 and 0603, and packages of SO, SOP, SOJ, TSOP, TSSOP, QFP, BGA and U-BGA. The minimum IC precision is 0.3mm and the minimum BGA precision 0.5mm.

All makers ensure products conform to industry standards, including CE, FCC, RoHS and UL. This is regardless of the volume as they generally accept small orders, and the short delivery lead times companies guarantee.

EMS suppliers use ICs, passive components, PCBs, connectors and other inputs from local or foreign sources, depending on what is specified by customers.

In the past year, component costs rose. That of chip capacitors went up by more than 10 percent, which together with higher labor expenditure, forced some makers to increase product prices.

Outlay for inputs, however, is forecast to stabilize in the months ahead and will keep quotes steady.

The products in this gallery have been handpicked by our China-based market analyst for representing current trends in PCB assemblies from China makers.

PCB assembly uses up to 0201 components

This PCB assembly made with ±0.03mm placement precision by Kenling Electronics Co. Ltd, PCBA OEM-8427 model, has 0.3mm minimum lead and 0.4mm minimum BGA pitches, and integrates 0201 to 150x150mm components. The board thickness is 0.4 to 6mm. The smallest PCB that can be used is 50x50mm and the maximum 400x310mm. The minimum order is negotiable. Delivery lead time is 7 days.

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PCB assembly adopts 1oz copper

From Shenzhen Makerfabs Corp., the model MKE206FAB PCB assembly uses a 2-layer board with 1oz copper and lead-free HASL surface finish. The 1.6mm-thick PCB measures 100x100mm and has white silk-screening. Order quantity is negotiable. Delivery takes 7 days.

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PCB assembly based on SMT, DIP

Shenzhen Topwell Technology Co. Ltd accepts prototyping and low-volume orders for PCB assemblies such as this Top-PCB-710 model. It uses SMT and DIP processes, and lead-free soldering. The supplier also provides high-velocity and complex system assemblies, and configuration management. The negotiable minimum order has a delivery lead time of 7 days.

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PCB assembly based on FR-4 board

The 4layerPCBA model from Zitrok Electronics Co. Ltd is a PCB assembly on a 4-layer FR-4 board with 35µm copper on inner and outer layers, HASL surface finish, white silk-screening and green solder mask. The 1.6mm-thick PCB measuring 243.2x261mm has 10mil minimum line width and spacing, and as small as 0.7mm holes. Order quantity is negotiable. Delivery lead time is 5 days.

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