The latest UK EMS Industry Report provides some compelling statistics, and some key predictions, for the various markets operating within UK electronics manufacturing.
While there are a number of larger companies making their mark, most notably in the aerospace, defence and security sectors, it is encouraging to see the prevalence of small to medium size enterprises.
And it's among these smaller companies that we're likely to see some exciting new technologies, and some significant opportunities, as new products move from initial conception to market introduction.
For the industry as a whole there have been some modest increases over the last three years - rebounding from the decline of 0.5% back in 2015 and increasing by 2% in 2017 to reach £11,900 million.
And while uncertainties remain surrounding international trade tensions and the outcome of Brexit, there are predictions of further growth of around 0.1% through to the end of 2019 - reaching an estimated £12,384 million by the end of 2021.
So who's on the up...?
Aerospace and defence
The aerospace and defence industries have been identified as being key drivers of long-term growth with the electronics manufacturing market.
Although historically the UK government has focused its attention more heavily on larger companies, we can expect to see some increases in spending with smaller and medium sized businesses, with the goal of placing 25% of direct and indirect procurement with SMEs by 2020.
Medical electronics
A higher demand for medical electronics (pacemakers, defibrillators, drug-releasing pumps, hearing aids, diagnostic equipment etc) is providing the UK EMS industry with some significant market opportunities.
According to Reed Electronics Research, the output of medical electronics is on the increase and is anticipated to reach £1,275 million annually by 2021.
The manufacture of lower priced devices which are produced in higher volumes (for example personal health monitors) is continuing to be moved offshore to take advantage of the lower cost of production.
But over time it is predicted that OEMs may look to serve those markets within the UK, providing significant opportunities for those EMS providers with a local manufacturing presence.
Communications
The UK has traditionally had a strong foothold in the world of communication equipment, including fixed and wireless broadcasting. However pricing pressure and competition from low-cost offshore manufacturers has placed pressure on a number of the UK's more mature technologies.
Where new opportunities lie however is in the development of high-end products that utilise the latest technologies.
The surge in digitalisation, the Internet of Things and 5G are also anticipated to drive demand, with growth in EMS revenues predicted through to 2022.
Energy
The UK is recognised as a global leader in both upstream and downstream oil and gas development.
Electronics plays a crucial role in providing systems (signal conditioning devices, drill cabin controls) that are capable of operating in the harshest and most remote of environments.
The increasing focus on lowering energy usage and developing clean technology is also driving the demand for new energy efficient electronic products.
Industrial electronics
Control and instrumentation - including electronics, systems and displays for industrial and process control - is forecast to be one of the fastest and most competitive areas of growth within the UK EMS industry. Within the UK, the size of companies that are carving out their position is hugely variable - ranging from small to medium sized enterprises through to global multinationals.
... and who's in decline?
Computing
In contrast to other markets within electronics manufacturing, production in the computing sector has continued on a steady downward trajectory.
The first signs of decline were seen back to 2000, when many major UK computing manufacturers closed their factories and moved production to lower-cost offshore locations.
In 2000 the manufacture of computer equipment accounted for 40% of the UK's electronics manufacturing output. In 2017 that figure was in the region of 5.7%.
And it's a downward trend that is predicted to continue through to 2021 as manufacturers continue to look for ways to reduce costs by relocating production.
Consumer electronics
Although there are still specialist supplies of audio and video equipment being manufactured in the UK, the local production of consumer electronics is acknowledged as being minimal, offering just a few opportunities for a handful of EMS companies.
The UK EMS Industry Report also highlights the role that IoT and Industry 4.0 is playing in improving electronic assembly operations and test.
Much is being achieved currently through the use of Big Data, machine learning, and self-correcting systems - and there are substantial opportunities to be explored in the areas of new and wireless systems.
An increasing number of UK OEMs are also choosing to use electronics in their product offerings in order to fuel efficiency and create value for manufacturers, businesses and consumers.
