Understanding Electronic Manufacturing Services (EMS)

WHAT ARE ELECTRONIC MANUFACTURING SERVICES?

Electronic Manufacturing Services, often referred to as simply EMS or ECM which is Electronics Contract Manufacturing, are companies that offer to perform all the steps needed for the development and manufacturing of electronic products for original equipment manufacturers, or OEMs. Through these companies, OEMs can outsource some of their engineering and manufacturing tasks to improve their operational efficiency, reduce costs, increase speed and cut down on time to market, as well as focus on other central company activities such as research, development, strategy implementation, and marketing.

WHY DO WE NEED EMS?

The demand for technically advanced and innovative solutions continues to rise in the market as well as the general audience. Unfortunately, not every manufacturer has the resources, tools, or time needed to invest in the development and design of such consumer electronics and other tech products. So to retain their clients and also capitalize on the latest tech trends and advancements, OEMs turn to these third party manufacturing companies that take some of their load off of them and provide them with a cost effective solution that is designed and developed under the expertise and guidance of an experienced team. It enables them to leverage the skills and competencies that they may not possess command or control of, eliminating the need to invest in training or having to find skilled staff in their niche.

WHAT CAN AN EMS DO FOR YOU AND YOUR COMPANY?

The practical and commercial applications of Electronic Manufacturing Services are limitless, proving to be an incredibly useful tool in fields such as consumer electronics and products (like computers and smartphones), industrial products, health care and medical equipment, defense, military, and aerospace technology, and most importantly, electronic components for semiconductor chips and connectors.

When you hire an Electronic Manufacturing Service, you are basically paying them to design or produce an electronic product for you by leveraging their skills and tools that you may not have access to. EMS companies can perform a range of functions and tasks for you, including designing, testing, manufacturing, distribution, as well as assembly. If you are looking to get an electronic component built and manufactured, all you may need to provide the EMs is the design file for the component and they will take care of the rest as per your requirements. On the other hand, if you need to have a product assembled, you may be asked to provide the individual components as well as an assembled sample along with the design file to proceed.

DESIGN

The design process is one of the most critical steps of any electronic development project as it sets the stage for the rest that is to come. A good circuit design will make or break your product which is why experience and expertise is needed to formulate one based on your requirements and specifications. The EMS company would perform all the consultation and research for you and then communicate a preliminary idea or concept regarding the product design, which you can further build on and move onto the subsequent development processes once you are satisfied with the design.

MANUFACTURING

Printed circuit boards, or PCBs, are most commonly produced using EMS companies and premises. These services can also be used for microelectronic manufacturing, which includes components of semiconductors and silicon chips.

TESTING

Once a prototype has been created, an important step that some people may forget is to test it out. You can leverage the services of a third party electronic contracting company that will perform the likes of compliance and laboratory testing, optical inspection, and environmental testing among others for you.

PRODUCTION

When it comes to the production of the products, some companies may help you with the product assembly, some may help you build sample prototypes for testing purposes, and others may help you go all the way to a finished bulk of functioning electronic products. Based on the equipment and staff a company employs, they can be divided into categories based on the volume their premises is capable of handling or producing at a given time. Low volume providers tend to 1-100 products, and are best suited for prototype production. Medium volume handle 100-10,000 products on a yearly basis, while high volume EMS are capable of producing over 10,000 product units annually.

MARKET SEGMENTS IN THE ELECTRONIC MANUFACTURING SERVICES INDUSTRY

The EMS industry can be grossly divided into four basic tiers. This division is based on their revenue.

• Tier 1 is above $5 billion
• Tier 2 is between $500 million to $5 billion
• Tier 3 is between $100 million to $500 million
• Tier 4 is below $100 milion

Another way to make the division of the market segment in the EMS industry is based on the volume they produce. Based on this parameter, you can have:

• High Mix Low Volume (HMLV) EMS
• High volume Low Mix (HVLM) EMS

Here, Mix refers to the complexity or the models of PCB assembly used and Volume refers to the number of units manufactured.

Typically, higher end EMS will be employing the use of automation throughout their premises to speed up the process and produce high quality products in bulk. Lower tier or smaller EMS companies may focus on building carefully assembled prototypes and low volume loads.

Market research shows that the popularity and use of Electronic Manufacturing Services is only expected to rise in the coming years with the annual growth being forecasted to reach a peak of 7.5% between 2018 and 2024. All in all, Electronic Manufacturing Services have produced great benefit for many OEMs all across the globe and enables them to provide high quality electronics and other consumer products to the market. When choosing an Electronics Manufacturing Service for your project, it is imperative that you make sure that the company has experience dealing with your kind of products, that they have something to offer when it comes to producing value added products, and that they invest in the proper tools and equipment that is needed to ensure optimum development of your electronics and electronic components.

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