Electronics Manufacturing Services for Net-Working (Netcom) Market, Global Outlook and Forecast 2025-2032

MARKET INSIGHTS

Global Electronics Manufacturing Services for Net-Working (Netcom) market was valued at USD 527.75 billion in 2024 and is projected to reach USD 748.26 billion by 2032, exhibiting a CAGR of 5.2% during the forecast period. The market's steady growth is driven by increasing demand for connected devices, advancements in 5G infrastructure, and the expansion of cloud computing services.

Electronics Manufacturing Services (EMS) providers offer end-to-end solutions, including design, manufacturing, testing, and supply chain management for networking and communication equipment. These services enable OEMs to focus on innovation while outsourcing complex production processes. The market is dominated by electronic manufacturing, which holds a 45% share, followed by engineering services and logistics solutions.

Asia-Pacific leads the market with a 45% revenue share, attributed to strong manufacturing capabilities in China and Taiwan. Meanwhile, North America and Europe remain key regions due to high technology adoption. Major players like HONHAI, Luxshare, and Pegatron collectively control over 40% of the market, leveraging their expertise in large-scale production and R&D investments.

MARKET DYNAMICS

MARKET DRIVERS

Accelerating 5G Network Deployments to Boost EMS Market Growth

The rapid global rollout of 5G infrastructure is creating unprecedented demand for network equipment manufacturing services. With over 300 commercial 5G networks deployed worldwide as of 2024, telecom operators are investing heavily in base stations, small cells, and network core components that require sophisticated electronics manufacturing capabilities. This technological transition necessitates precise RF component assembly, complex PCB manufacturing, and rigorous testing protocols - capabilities that leading EMS providers specialize in. The increasing integration of advanced technologies like beamforming and massive MIMO in 5G equipment further drives the need for specialized manufacturing expertise.

Growing Demand for Cloud Networking Equipment to Expand Market Opportunities

The shift toward cloud-native network architectures is significantly impacting the Netcom equipment ecosystem. Hyperscale data center operators are projected to increase their networking hardware spending by nearly 12% annually through 2028, creating substantial manufacturing requirements for switches, routers, and optical transport equipment. Recent trends show EMS providers expanding their capabilities in high-speed digital and optical manufacturing to meet this demand, with leading companies investing in advanced surface-mount technology lines capable of handling 25G/100G networking components.

➤ The industrial networking segment alone is forecast to grow at 9% CAGR through 2030, driven by Industry 4.0 adoption across manufacturing sectors.

Furthermore, the increasing complexity of network security appliances is driving OEMs to partner with EMS providers who can integrate both hardware and software elements. This convergence of networking and security functionality requires precise manufacturing quality control and comprehensive testing protocols throughout the production process.

MARKET RESTRAINTS

Supply Chain Disruptions and Component Shortages to Constrain Market Growth

The electronics manufacturing sector continues to face challenges from persistent component shortages and supply chain volatility. Networking equipment manufacturing is particularly vulnerable due to its reliance on specialized semiconductors like Ethernet PHY chips and network processors, which have experienced allocation periods extending beyond 40 weeks for certain models. This has forced EMS providers to implement costly inventory management strategies and redesign cycles to accommodate component substitutions.

Other Challenges

Geopolitical Tensions
Trade restrictions and national security concerns are reshaping global supply chains, requiring EMS providers to establish redundant manufacturing locations. The networking equipment sector is particularly affected due to its strategic importance in communications infrastructure.

Rising Labor Costs
Increasing wages in traditional manufacturing hubs are pressuring profit margins, forcing companies to balance cost competitiveness with technical capability requirements. The specialized nature of Netcom equipment assembly limits opportunities for automation in certain manufacturing processes.

MARKET OPPORTUNITIES

Emerging Open RAN Architecture to Create New Manufacturing Requirements

The transition toward open, disaggregated network architectures presents significant opportunities for EMS providers. Open RAN deployments are projected to grow at 24% CAGR through 2030, requiring manufacturers to support multi-vendor hardware integration and rigorous interoperability testing. This architectural shift is driving demand for specialized certification capabilities and software-hardware integration services across the network equipment supply chain.

Edge Computing Expansion to Drive Distributed Manufacturing Models

The proliferation of edge computing infrastructure is creating new opportunities for localized manufacturing and regional service models. With forecasts predicting over 25 million edge computing nodes deployed by 2027, EMS providers are establishing specialized facilities closer to deployment locations to reduce logistics costs and improve time-to-market for edge networking equipment. This strategic positioning helps address the sensitive timing requirements of edge deployments while meeting regional content regulations in key markets.

MARKET CHALLENGES

Technical Complexity of Next-Generation Networking Equipment to Increase Manufacturing Hurdles

The evolution toward higher-speed networking standards presents significant manufacturing challenges. The transition to 400G and 800G optical interfaces requires EMS providers to invest in advanced signal integrity testing equipment and specialized assembly capabilities. These technologies demand extremely tight tolerances in PCB manufacturing and assembly, with requirements often exceeding those of conventional computing hardware. The industry faces additional challenges in thermal management as networking equipment power densities continue increasing.

Regulatory Compliance Burdens
Network equipment manufacturers must navigate an increasingly complex regulatory landscape encompassing safety, emissions, and cybersecurity requirements. The certification process for networking hardware has become more stringent, particularly for equipment destined for critical infrastructure applications. These compliance requirements add significant time and cost to the product development cycle, impacting time-to-market for new networking solutions.

Segment Analysis:

By Type

Electronic Manufacturing Segment Dominates Due to High Demand for Contract Manufacturing Services

The market is segmented based on type into:

• Electronic Manufacturing

• Engineering Services

• Test Development and Implementation

• Logistics Services

• Others

By Application

Consumer Electronics Segment Leads the Market Owing to Rising Device Adoption

The market is segmented based on application into:

• Consumer Electronics

• Computer

• Communications

• Industrial

• Automotive Electronics

• Others

By Service Capability

End-to-End Manufacturing Services Gain Traction for Streamlined Production

The market is segmented based on service capability into:

• Design and Engineering

• Component Sourcing

• PCB Assembly

• System Integration

• Testing and Quality Assurance

By Technology

5G Networking Equipment Manufacturing Shows Strong Growth Potential

The market is segmented based on technology into:

• Wired Networking

• Wireless Networking

• Optical Networking

• Network Security Solutions

COMPETITIVE LANDSCAPE

Key Industry Players

EMS Providers Accelerate Technological Capabilities to Capture Network Infrastructure Demand

The global electronics manufacturing services (EMS) for networking/telecom equipment market remains highly competitive, dominated by a mix of established EMS providers and emerging regional specialists. The market witnessed increased consolidation between 2020-2024 as companies expanded capabilities to address 5G infrastructure demands, with M&A activity focused on acquiring specialized RF and optical networking expertise.

HONHAI (Foxconn) maintains market leadership with approximately 15% revenue share, leveraging its massive scale in consumer electronics to achieve cross-industry synergies. Their recent $280 million investment in Vietnam networking equipment facilities demonstrates strategic positioning for diversifying supply chains away from China.

Meanwhile, Pegatron and Luxshare follow closely behind with collective 25% market share, having secured major contracts from cloud service providers upgrading data center networking hardware. Both companies are aggressively developing co-packaged optics capabilities to capitalize on hyperscale data center upgrades.

North American EMS providers face mounting pressure as Jabil and Flex Ltd struggle to compete on cost efficiency, though both maintain technological advantages in high-mix low-volume manufacturing for industrial networking applications. Recent expansions in Malaysia and Mexico indicate their regionalization strategies to balance cost and proximity to North American OEMs.

The competitive landscape continues evolving as Chinese EMS providers like BYD Electronics and USI move up the value chain, transitioning from basic PCB assembly to complete system integration services for domestic networking OEMs. This trend is reshaping global market dynamics as these players capture share in China's rapidly growing 5G infrastructure rollout.

List of Key Electronics Manufacturing Services (EMS) Companies in Networking Market

• HONHAI (Foxconn) (Taiwan)

• Luxshare Precision Industry Co., Ltd. (China)

• Pegatron Corporation (Taiwan)

• Flex Ltd (Singapore)

• Jabil Inc. (U.S.)

• Quanta Computer Inc. (Taiwan)

• BYD Electronic (International) Company Limited (China)

• Sanmina Corporation (U.S.)

• USI (Universal Scientific Industrial) (Taiwan)

• Celestica Inc. (Canada)

• Wistron Corporation (Taiwan)

• Plexus Corp. (U.S.)

ELECTRONICS MANUFACTURING SERVICES FOR NET-WORKING (NETCOM) MARKET TRENDS

Rising Demand for Advanced Network Infrastructure Drives EMS Market Growth

The global push for enhanced connectivity solutions is significantly boosting the Electronics Manufacturing Services (EMS) for Net-Working (Netcom) market. With an estimated valuation of $527,750 million in 2024, the market is projected to expand at a 5.2% CAGR, reaching $748,260 million by 2032. This growth is primarily fueled by rapid 5G network deployments, accounting for over 35% of new networking infrastructure projects globally. Original Equipment Manufacturers (OEMs) are increasingly outsourcing production to EMS providers to leverage their specialized capabilities in high-frequency PCB fabrication, miniaturized component assembly, and thermal management solutions. Furthermore, the integration of AI-driven quality control systems in manufacturing processes has reduced defect rates by approximately 40%, enhancing overall production efficiency.

Other Trends

Supply Chain Diversification Strategies

Recent geopolitical tensions have accelerated supply chain restructuring, with 45% of OEMs now adopting a China-plus-one strategy for network equipment manufacturing. This shift has led to new EMS facility investments across Southeast Asia, particularly in Vietnam and Thailand, where production costs are 15-20% lower than traditional manufacturing hubs. Concurrently, nearshoring trends in North America have seen Mexico's EMS sector grow by 12% annually, supported by USMCA trade provisions and proximity to key enterprise networking customers. EMS providers are responding by establishing multi-location manufacturing footprints, with the top three players now operating an average of 18 production facilities across different regions.

Convergence of Network and Edge Computing

The emergence of edge computing architectures is creating new opportunities for EMS providers specializing in compact, hardened networking equipment. Demand for ruggedized switches and gateways has grown by 28% year-over-year as industrial IoT deployments expand. This has driven innovations in conformal coating techniques and vibration-resistant assembly processes, with leading EMS firms reporting 30% shorter development cycles for edge networking solutions. The market is witnessing increased vertical integration, with several top-tier providers now offering complete design-to-deployment services for 5G small cells and industrial routers. Additionally, energy-efficient manufacturing practices have become critical, with new production lines reducing power consumption by 25% through optimized surface-mount technology processes.

Regional Analysis: Electronics Manufacturing Services for Net-Working (Netcom) Market

North America
North America remains a critical hub for electronics manufacturing services (EMS) in the networking and communications (Netcom) sector, accounting for approximately 27% of the global market share. The U.S. dominates the region with its strong ecosystem of OEMs and EMS providers, supported by high demand for cloud infrastructure, 5G deployment, and IoT connectivity solutions. The CHIPS and Science Act, allocating over $52 billion to semiconductor manufacturing and R&D, has further strengthened the supply chain for networking hardware. However, reliance on Asian manufacturing for cost efficiency poses challenges. Companies like Jabil and Flex Ltd have expanded their U.S. facilities to cater to reshoring trends, focusing on high-value networking equipment such as routers, switches, and data center components.

Europe
Europe's 21% market share reflects steady growth in EMS for Netcom, driven by stringent data privacy regulations (GDPR) and increasing 5G investments. Germany, the U.K., and France lead the region, with demand rising for secure, localized production of networking hardware. The European Chips Act aims to bolster semiconductor self-sufficiency, benefiting EMS providers. However, high labor costs and energy prices push manufacturers toward automation and lean processes. Players like Zollner and Celestica emphasize smart manufacturing to serve telecom giants such as Nokia and Ericsson. Sustainability is another key focus, with recyclable materials and energy-efficient designs gaining traction.

Asia-Pacific
With 45% of global EMS-Netcom revenue, Asia-Pacific is the undisputed leader, fueled by China's "Made in China 2025" initiative and India's production-linked incentives (PLIs) for electronics. Taiwan, South Korea, and Vietnam are emerging as alternatives to China amid geopolitical tensions. The region excels in cost-efficient mass production, with giants like HONHAI, Luxshare, and Pegatron dominating supply chains for consumer and enterprise networking gear. However, overcapacity in low-margin segments and U.S.-China trade restrictions pose risks. The shift toward advanced packaging and high-speed PCB manufacturing is reshaping the competitive landscape.

South America
South America's EMS market for Netcom is nascent but growing, with Brazil and Mexico as key hubs due to their proximity to North American markets. The automotive and industrial sectors drive demand for networking components, though economic instability limits large-scale investments. Local EMS providers focus on assembly and testing services, relying on imported semiconductors. Government incentives, like Mexico’s IMMEX program, aim to attract foreign manufacturers. Nevertheless, infrastructure gaps and inconsistent policies hinder rapid expansion, keeping the region a secondary option for global players.

Middle East & Africa
The MEA region shows long-term potential with smart city initiatives in the UAE and Saudi Arabia boosting demand for 5G and IoT infrastructure. However, limited local expertise in electronics manufacturing keeps the market reliant on imports and foreign EMS partnerships. Israel stands out for niche high-tech networking solutions, while Turkey leverages its EU customs union for electronics exports. Challenges include logistical bottlenecks and underdeveloped supply chains, though free zones like Dubai Industrial City are attracting EMS investments for networking equipment assembly.

Report Scope

This market research report offers a holistic overview of global and regional markets for the forecast period 2025–2032. It presents accurate and actionable insights based on a blend of primary and secondary research.

Key Coverage Areas:

• ✅ Market Overview

  • Global and regional market size (historical & forecast)

  • Growth trends and value/volume projections

• ✅ Segmentation Analysis

  • By product type or category

  • By application or usage area

  • By end-user industry

  • By distribution channel (if applicable)

• ✅ Regional Insights

  • North America, Europe, Asia-Pacific, Latin America, Middle East & Africa

  • Country-level data for key markets

• ✅ Competitive Landscape

  • Company profiles and market share analysis

  • Key strategies: M&A, partnerships, expansions

  • Product portfolio and pricing strategies

• ✅ Technology & Innovation

  • Emerging technologies and R&D trends

  • Automation, digitalization, sustainability initiatives

  • Impact of AI, IoT, or other disruptors (where applicable)

• ✅ Market Dynamics

  • Key drivers supporting market growth

  • Restraints and potential risk factors

  • Supply chain trends and challenges

• ✅ Opportunities & Recommendations

  • High-growth segments

  • Investment hotspots

  • Strategic suggestions for stakeholders

• ✅ Stakeholder Insights

  • Target audience includes manufacturers, suppliers, distributors, investors, regulators, and policymakers

FREQUENTLY ASKED QUESTIONS:

What is the current market size of Global Electronics Manufacturing Services for Net-Working (Netcom) Market?

-> The global electronics manufacturing services for Net-Working (Netcom) market was valued at USD 527,750 million in 2024 and is projected to reach USD 748,260 million by 2032.

Which key companies operate in Global Electronics Manufacturing Services for Net-Working (Netcom) Market?

-> Key players include HONHAI, Luxshare, Pegatron, Flex Ltd, Jabil, BYD Electronics, Sanmina, and USI, with the top three companies holding over 40% market share.

What are the key growth drivers?

-> Key growth drivers include rising demand for consumer electronics, expansion of 5G infrastructure, and increasing outsourcing by OEMs to reduce manufacturing costs.

Which region dominates the market?

-> Asia-Pacific is the largest market with 45% share, followed by North America (27%) and Europe (21%).

What are the emerging trends?

-> Emerging trends include Industry 4.0 adoption, smart manufacturing solutions, and sustainable production practices in electronics manufacturing.