EMS industry leverages opportunities outside consumer electronics

Providers of EMS in China continue to enhance automation, precision and reliability to widen market reach.

Wireless communications, desktop and industrial computers, medical equipment, electric vehicles and emergent VR devices will remain the core markets of electronics manufacturing services providers in China. As most companies are small and midsize, they focus on these applications instead of on hugely popular consumer electronics. The last is dominated by foreign makers with a clear advantage in terms of technological and production capability over the local pool.

The wireless communications industry is still the biggest demand drawer and expected to represent 38 percent of shipments in 2020 from 36 percent in 2016. Computers will have a sizeable 31 percent share despite a slight adjustment by then, while the last three categories are steady at 17 percent. Bringing up the rear are CE products, including laptops and tablets.

To match product upgrades in these markets and broaden reach, China EMS suppliers continue to improve their levels of automation, precision and reliability by acquiring more state-of-the-art manufacturing equipment.

For assemblies with ultrasmall and low-profile electronic components, makers adopt surface-mount machines with ±0.05mm precision and solder paste printers with ±0.025mm. Leadsintec is now using advanced solder paste printers and AOI equipment.

Shenzhen Kingford Technology Co. Ltd has brought in automatic exposure machines and solder paste printers for superlong PCB assemblies.

In addition, suppliers implement strict QC measures during production to ensure a high quality of output. Shenzhen Kingford has added hipot test devices for this.

Companies are looking to try the new cloud manufacturing model as well. This is to provide better services through shortened production at a lower cost. Topscom has introduced the F2pcb platform as a one-stop solution covering product design, material sourcing, production and delivery.

Besides these pursuits, most domestic manufacturers in the EMS sector are planning further expansion in the next two years. Leadsintec, which increased its business by 20 percent in the past year, targets to keep the momentum until 2018. The maker ships 80 percent of its turnout overseas and expects to achieve 20 percent growth rate in its exports as well.

Globally, the industry has been on steady rise. Total sales reached $449.4 billion in 2015 and are projected to hit up to $519.3 billion by end-2017, according to IPC.

Among the hundreds of EMS companies in mainland China are the world's top providers, which continue to benefit from the booming electronics industry, relatively low production cost and comprehensive supply chain there. They are Foxconn, Pegatron, Flextronics, Jabil, Sanmina, Celestica, the New Kinpo Group, Wistron, Universal Scientific Industrial and Plexus. Some have factories spread across China and not just in the coastal provinces of Guangdong, Jiangsu and Zhejiang where most electronics manufacturers congregate.

Local suppliers represent more than 60 percent of the manufacturing pool. The other foreign-owned operations include EMS specialists from Taiwan and Hong Kong.