The evolution of contract manufacturers to Electronics Manufacturing Service (EMS) providers is primarily due to outsourcing trend from OEMs combined with the reliability, cost, and time advantage delivered on the product. Three decades ago, to outsource component manufacturing was a critical strategic decision that involved people from top management. However, over a period of time, increasing market demand for lower cost products as well as the ability of the contract manufacturers to handle complex processes with cost effectiveness and perfection created a surge in outsourcing from the OEMs. As the demand for increased functionality and lower cost products grew, contract manufacturers had started to automate their process to gain margins. When the margin grew even thinner, the contract manufacturers decided to add high-value services which transformed them into EMS providers. The range of services offered by them included Purchasing, Design and Engineering, New Product Introduction, Prototyping, Testing, Repair Services, End-of-life support, and Product Lifecycle management. The industry has matured and is on the verge of yet another transformation driven by technological developments, which could see more stakeholders inside the ecosystem.

Impact of 3D Printing on the EMS Ecosystem

Introduction to 3D Printing in Electronics and Current Status

3D Printing is an additive manufacturing technology, which is able to produce components of any complex shapes in a single run, with better accuracy, resolution, and durability. The advancements in nozzle design and software, and the ability to dispense various materials such as conductive inks had led to the introduction of 3D Printers in electronics manufacturing. The technology is primarily used in prototype developments for manufacturing PCB. Furthermore, a notable development is the Aerosol Jet Printing technology provided by Optomec Inc which expands the list. Features such as 3D interconnect for chips, as well as some of the active and passive components including resistors, capacitors, antennas, and filters are printed. The components developed so forth are claimed to have high performance and reliability even at higher frequencies.  3D Print applications are also found in the manufacturing of cases for electronics products.

Companies that provide 3D Print Technologies: Optomec Inc, Sculpteo, NanoDimensions(NNDM), BotFactory, Voxel8, Pulse Electronics.

The Benefit of 3D Printing in Electronics Manufacturing

The main advantage of 3D printing PCB in prototypes is its ability to build the component fit-to- dimensions quickly and at a lower cost. Design software, printer, and ink are all necessary to build the prototype. This leverages the designers with a huge flexibility to iterate the design and retest quickly. Companies such as Sculpteo offer to print the model through online control and commit to deliver the prototype in 2-3 days. Furthermore, this provides the ODM and OEM for securing the IP, as not many outside parties are involved in this development model.

Analysis and Expected Impact of 3D Print Technology on EMS Providers

It is identified that 3D printers can be integrated into EMS for design prototyping, tooling, final production, and testing. In short-term, this development is likely to impact the supply chain of the EMS ecosystem. The ability of the 3D printers to virtually build all of the necessary electronics components, coupled with the low-cost, self-build, and in-house tooling solution pose threat to all the related suppliers. Low-cost tooling solution is necessary for EMS to support products with shorter life-cycle as well as to provide flexibility in operations. However, in medium and long-term, the evolution of 3D printing to mass produce will be subject to Research and Development activities and the successful conversion into commercialization. For EMS providers, even though the impact in the supply chain of the ecosystem is inevitable, embracing this technology is a must. This equips EMS providers to track the developments in the technology through interactions with equipment vendors. Furthermore, EMS can leverage this to maintain and improve the relationship with industry verticals. From OEM and ODM perspective, unless the project is highly confidential, they may not necessarily invest on 3D Printing but continue to focus on their core values. Another aspect that will drive the 3D print technology in EMS is the growing trend for IoT products, which will require many product conceptualizations and design services from EMS. In summary, the impact of 3D printing on supply chain could be negative provided the scale is higher, but there is a positive build in the ecosystem for design and prototyping.

The Impact of IoT in Cross Industry Relationship and the EMS Ecosystem

The advent of IoT could see more cross-industry partnerships with EMS for developing smart and innovative solutions. In this highly competitive landscape where sensing of the market is quick, faster solutions to the target market is a must. The recent IoT product “MAX” developed jointly by the EMS giant- Celestica Inc, and a Multinational Conglomerate company- thyssenkrupp Elevator is a very good example of how IoT is driving cross-industry partnerships. Another instance is where Flex Ltd has developed an IoT sensor for sports and fitness industry in collaboration with Northeastern University. EMS providers are increasingly driving innovation programs in the IoT segment, which aims to facilitate cross-industry interactions. This will definitely help EMS to fetch orders to manufacture as well as stay ahead in the competition. However, association with the right partner and integrated supply chain network in the ecosystem will be highly critical to realize the strategies of all the engaging companies. Moving forward, this kind of cross-industry relationships is a must, which is foreseen to produce dynamic expansion in the industry ecosystem and provide innovative solutions for the market.

Conclusion

The EMS ecosystem is expected to witness changes with slight negative impact on the supply chain due to advancements in 3D print technology, while more technology providers and innovative solution seekers from different verticals are expected to grow with the advent of Internet of Things (IoT). While there are not much value added services that EMS could add to support this, they must continue to integrate advanced technologies in their core service strengths such as assembly, testing, and design services. Developing the relationship with innovation seekers on the IoT platform will continue to grow the EMS ecosystem.

About Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

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