EMSNOW Publisher Eric Miscoll shares further insights about the evolution of the electronic manufacturing services business model derived from the EMSNOW/in4ma EMS & ODM Global 100 List and continuing interviews with their executive teams.
Over the past several decades, the EMS industry has continuously evolved. Not only in capability and geographic footprint, but even in how it defines itself. What began as simple contract manufacturing (CM) transitioned into EMS, then EEMS and EMS2, and eventually into increasingly sophisticated descriptions intended to differentiate and reflect broader value propositions beyond manufacturing alone.
Historically, EMS companies were known primarily for expertise in PCB assembly and higher-volume manufacturing execution. Today, however, the industry has become defined by something much larger: supply chain management expertise. In many ways, the modern EMS provider has evolved into a strategic operations partner capable of managing sourcing, logistics, inventory optimization, global manufacturing footprints, and increasingly complex customer requirements.
In studying the new EMS & ODM Global 100 list by EMSNOW and in4ma, this continuing evolution became especially apparent. Many of the industry’s top-performing companies are no longer positioning themselves solely as manufacturing providers, but as strategic technology, supply chain, and solutions partners. The company profiles revealed a clear trend toward diversification, vertical integration, platform development, and ownership of differentiated capabilities. In many respects, the Global 100 ranking highlights an industry that is steadily redefining itself beyond the traditional boundaries of EMS.
This transformation reflects advice long championed by respected industry veteran Charlie Barnhart, who years ago encouraged EMS companies to diversify their revenue streams. His vision extended beyond traditional build-to-print manufacturing and included value-added services such as design, fulfillment, and repair, and even the development of proprietary subassemblies and technologies that OEM customers could integrate into their own products.
Today, many of the industry’s largest players are actively pursuing what could be described as “De-EMSing” whereby they are evolving beyond pure manufacturing services into hybrid models that combine manufacturing with platforms, solutions, intellectual property, and vertical integration.
Examples of this evolution are increasingly visible across the top tier of the industry:
- Flex is aggressively positioning itself as a broader solutions and platform company.
- Celestica has built meaningful proprietary platforms that create customer differentiation and stronger ownership positions.
- Foxconn continues expanding into EV platforms, semiconductors, and digital infrastructure.
- Jabil remains one of the industry’s premier EMS operators while selectively pursuing vertical integration.
- Sanmina has developed differentiated proprietary technologies alongside its high-end manufacturing capabilities.
The motivation behind this shift is clear. Moving toward products, platforms, and differentiated services offers several strategic advantages:
- Higher margins compared to traditional EMS manufacturing.
- Stickier, longer-term customer relationships.
- Reduced exposure to pricing pressure common in commoditized build-to-print business.
- Greater strategic relevance to OEM customers.
At the same time, this evolution introduces new challenges, including increased capital requirements, investment in intellectual property, and greater operational risk.
Despite these developments, the EMS industry remains overwhelmingly manufacturing-driven today. Most companies are layering additional services and capabilities onto their core manufacturing operations rather than fully transforming into product companies, and most will tell you that they have no intention of competing with their customers. In many respects, Flex and Celestica may represent the most advanced examples of the hybrid EMS/platform model currently emerging in the market.
Ultimately, this evolution appears both normal and necessary for the EMS industry. As supply chains become more complex and OEMs seek partners capable of delivering broader strategic value, EMS companies must continue adapting beyond traditional manufacturing roles. OEM customers increasingly appreciate partners that can contribute not only production capacity, but also innovation, resilience, engineering support, and differentiated solutions. The continued “De-EMSing” of the industry may therefore represent not a departure from EMS, but rather its next logical stage of maturity
