Application Watch: EMS market growth spurs steady investment in equipment

EMS companies sustain hardware acquisition and services enhancements to fulfill demand for higher product quality, and reduced manufacturing lead time and cost.

As contract manufacturing remains a popular solution in many electronics industries, competition in this segment has always been intense. It necessitates constant upgrades in production technique, machinery and services to attract and keep clients, and meet demand for greater quality, efficiency and cost saving.

In mainland China, this is all the more so because it is also where a number of global players in the electronics manufacturing services or EMS converge. The hub has a comprehensive industry chain, comparatively lower production and labor cost, and huge market, which continue to draw companies to set up operations there.

To find and maintain a niche in an increasingly crowded market, locally owned EMS providers keep up by purchasing advanced manufacturing and testing equipment. Tecoo Electronics Co. Ltd spent $140,000 to install a new SMT line, automatic welding machines, and ICT and high- and low-temperature test devices in 2018. It is ready to buy high-precision production equipment as needed this year and in 2020.

Domestic companies likewise strive to establish long-term cooperation with their customers by accommodating small and mixed orders and offering integrated services. DBG Holdings of Hong Kong, which caters to Xiaomi and Huawei, provides design, manufacturing, supply chain management and aftersales.

To reach a wider market, the majority in the mainland EMS sector covers a range of products, training sights not only on consumer electronics but also on specialized fields. The latter includes communications, industrial control, automotive and medical products. At present, consumer electronics represent 10 to 50 percent of total shipments. Suppliers said they offer flexibility and can adjust the ratio, depending on the orders.

The global EMS industry is expected to continue benefiting from steady growth of 5 to 10 percent in sales value this year and in 2020. The same trend applies to the mainland, especially as companies are anticipating higher exports in the months ahead. Of aggregate output, they send between 30 and 90 percent overseas.

Interviewed Taiwan supplier CviLux Corp., which operates in the mainland as well, will increase production by another 15 percent this year and looks forward to an export increase of 5 to 10 percent. One-third of its shipments are for destinations abroad.

There are companies that are not only boosting output but are also building new facilities to meet rising demand. Hong Kong's DBG invested $130 million in a second production base in Huizhou in Guangdong province. The factory will handle EMS for smartphones, tablet PCs, wearable devices and smart home products. It is scheduled to begin mass manufacture in 2H2019.

The mainland's EMS sector includes major foreign companies such as Foxconn, Pegatron, Flex, Jabil and Celestica, while among the homegrown counterparts are USI, Shenzhen Kaifa and 3CEMS. The last three are in the list of the world's top 50 makers in this field. The rest of the locally owned enterprises are small and midsize operations.

The large EMS manufacturing bases in the mainland are in the Pearl River Delta and the Yangtze River Delta regions, and the Bohai Bay Rim Economic Region. The key city locations are Shenzhen, Dongguan, Zhongshan and Huizhou in Guangdong, Suzhou in Jiangsu, Langfang in Hebei, and Shanghai and Tianjin. Some of Foxconn's facilities in the central region are in Lanzhou in Gansu, Zhengzhou in Henan and Guizhou province.

Design to aftersales

EMS providers in the mainland offer a comprehensive package from product design, material and components sourcing, manufacture, testing and shipment to aftersales.

They can work with any PCB, from single-sided to multilayer. SMT and through-hole methods are used to mount components in various packages, including COB, BGA, QFP, QFN and TSOP, and sizes. The last can be as small as 01005 and between 0.2 and 25mm in height. Companies can achieve a minimum precision of 0.04mm for BGA and 0.03mm for ICs.

To ensure product quality, makers perform checks starting from IQC, IPQC, FQC to OQC. They implement 100 percent electronic testing and 100 percent visual inspection.

To match customers' specifications, companies use local or imported materials and components. ICs are usually from foreign providers such as Avnet and Arrow, while PCBs and passive components come from the domestic supply. Some manufacturers have in-house capability for making PCBs.

The cost of inputs is expected to stabilize and keep product prices from rising in coming months.

The products in this gallery have been handpicked by our mainland China-based market analyst for representing current trends in EMS from mainland China and Taiwan makers.

Bluetooth audio streaming module

For sound bars, and wireless stereo speakers and headsets, the model Cvilux-CBM81SPK02 from CviLux Corp. is a Bluetooth module for streaming audio. It supports HSP, HFP, A2DP and AVCRP, and uses HCI UART. The 28x15mm unit has 94dB SNR and operates on 3.3V. I/O includes microphone, audio line-in and NFC.

The supplier requires an order of at least 500 sets. Delivery lead time is 28 days.

Inquire Now

PCB assembly uses up to 0201 components

Hua Xing PCBA Ltd's model PCA_003-002 PCB is assembled using SMT or through-hole and COB or BGA technologies. It undergoes X-ray, AOI, and electronic and functional testing. The unit uses as small as 0201 components, and a multilayer, HDI, high-frequency, flexible or Tg170 PCB.

The minimum order is negotiable. Delivery lead time is 15 days.

Inquire Now

PCB assembly uses 8-layer board

Tecoo Electronics Co. Ltd's TK-PCBA model PCB assembly uses an 8-layer board and consists of BGA components with 0.5mm minimum precision.

The minimum order is 100 units. Delivery is within 7 days.

Inquire Now

SMT, through-hole PCB assembly

This model Topscom190114003 PCB assembly is an example of Topscom Precision Industry Co. Ltd's capability to handle through-hole, SMT, COB and BGA technologies. The supplier also has the facilities for making ABS, PP, POM, PVC, TPR, TPU, PA+glass fiber and custom materials, and for chrome plating, painting, water transfer printing and texture finishing.

The negotiable minimum order is for delivery within 7 days.

Inquire Now