New IPC Report Assesses Growth Potential in North American EMS Industry

2018 Annual Report and Forecast for the North American EMS Industry Released

The North American electronics manufacturing services (EMS) industry has an $81 billion served available market with great potential for further growth, according to IPC’s 2018 Annual Report and Forecast for the North American EMS Industry, published this week. An analysis of the market indicates that the North American EMS industry has penetrated only about 28 percent of the total available market based on what OEMs in the region could outsource. Forecasts contributed by New Venture Research predict steady growth for the EMS industry through 2022, both globally and in North America.

The rate of sales growth for the participants in IPC’s North American EMS Statistical Program has increased every year since 2014, reaching 10.5 percent year-over-year in 2017. EMS order backlogs as percentages of sales have also grown steadily over the past five years. The largest vertical market for the program participants in 2017 was industrial electronics, which captured 37 percent of their aggregate sales. Revenue by product type, percentages of domestic production, number of EMS facilities and historical growth trends are also reported.

The report also covers aggregate financial and operational measurements of the participating companies in 2017 by company size tier. The smallest companies reported the highest profit margins, EBITDA and return on value added. An overview of the cost structure of North American EMS companies by size tier delves into percentages of direct labor; direct materials; direct overhead; and sales, general and administrative costs. Other measurements reported include revenue per employee, cash-to-cash cycle time, days sales outstanding, days of supply in inventory and capacity utilization.

The data on sales, orders, production, operations and financial measurements is from 86 companies that participated in IPC’s North American EMS Statistical Program in 2017, most of which are small and medium-sized companies.

The 2018 Annual Report and Forecast for the North American EMS Industry, (at $450 for IPC members and $900 for nonmembers, is available for download in IPC’s online store. For information on IPC market research reports and services, visit www.ipc.org/market-research-reports and www.ipc.org/IndustryData, or contact IPC’s market research team at marketresearch@ipc.org.