Semiconductor EMS & OEM
After chips are fabricated, packaged, and tested, they must be integrated into electronic systems. This is where EMS (Electronics Manufacturing Services) providers and OEMs (Original Equipment Manufacturers) come into play. EMS firms specialize in assembling circuit boards, modules, and entire devices on behalf of OEMs, while OEMs design, brand, and market finished products. Together, they represent the downstream stage of the semiconductor supply chain, transforming chips into consumer devices, industrial systems, vehicles, and infrastructure hardware.
Role in the Supply Chain
- EMS: Contract manufacturers that integrate semiconductors with other components (PCBs, displays, batteries) into assemblies and systems.
- OEM: Companies that design, brand, and sell end products such as smartphones, EVs, servers, and consumer electronics.
- Provide volume scaling, logistics, and global distribution networks for semiconductor-enabled products.
- Serve as the demand driver for semiconductor production, shaping chip design requirements.
EMS & OEM Mapping
| Segment | Representative Companies | Core Role | Notes |
|---|---|---|---|
| EMS (Contract Manufacturing) | Foxconn, Flex, Jabil, Pegatron, Wistron | PCB assembly, device integration, logistics | Often operate massive megafactories in Asia |
| OEM (Consumer Electronics) | Apple, Samsung, Dell, HP | Design branded consumer devices | Work closely with EMS for manufacturing scale |
| OEM (Automotive) | Tesla, Toyota, Volkswagen, BYD | Integrate chips into EVs, ADAS, infotainment | Automotive is one of the fastest-growing chip markets |
| OEM (Enterprise & Cloud) | Google, Amazon, Microsoft, Meta | Design AI servers, hyperscale datacenters | Heavy demand for GPUs, AI accelerators, networking silicon |
| OEM (Industrial & Infrastructure) | Siemens, GE, ABB | Integrate chips into automation and energy systems | Crucial for Industry 4.0 and smart infrastructure |
Risks & Bottlenecks
- Geographic Concentration: EMS manufacturing is concentrated in Asia, particularly China, Taiwan, and Southeast Asia.
- Supply Chain Disruptions: COVID, trade restrictions, and component shortages exposed EMS vulnerabilities.
- OEM Dependency: EMS firms are highly dependent on the design cycles and product launches of major OEMs.
- Geopolitical Pressures: U.S.-China tensions and reshoring initiatives are pushing OEMs to diversify manufacturing locations.
KPIs to Track
- EMS Capacity (units/month): Volume of devices or boards assembled.
- OEM Market Share (%): Share of end products by vendor in smartphones, PCs, EVs, etc.
- Lead Time (weeks): Average time from chip delivery to finished product assembly.
- Geographic Diversification: Distribution of manufacturing sites across regions.
Market Outlook
The EMS market was valued at ~$650B in 2023 and is projected to exceed $850B by 2030, with ~4% CAGR. Growth is driven by consumer electronics, EVs, and datacenter hardware. OEMs increasingly co-design semiconductors in partnership with foundries and OSATs, particularly for AI and custom silicon. Reshoring and friend-shoring policies are encouraging new EMS investments in the U.S., Mexico, and Europe, reducing dependence on China and Southeast Asia.
FAQs
- What’s the difference between EMS and OEM? – EMS assembles devices; OEMs design and brand them.
- Do OEMs own fabs? – A few (Samsung, Intel, Tesla) do, but most OEMs are fabless and rely on EMS + OSAT.
- Why are EMS firms so large? – They achieve scale by serving multiple OEMs across many product lines.
- How does reshoring affect EMS? – U.S. and EU policy incentives are pushing EMS providers to diversify away from China.
