Outsourced manufacturing makes up more than 50 percent of Global Cellular IoT Module shipments | So Good News


2022 saw strong growth in global cellular IoT module outsourcing manufacturing.

Global cellular IoT module outsourcing is suggested to be responsible for 52.4% of total Internet of Things module shipments in the first half of 2022. This is one of the many insights of the Global IoT Module Manufacturing Tracker researched by the technical analysis firm. Counter factor.

A new report refers to the growth for the IoT module manufacturing industry.

The report has observed the growth of several players in the global Cellular Internet of Things Module manufacturing industry. Original Design Manufacturers (ODM) increased 45% year-over-year in the first half of 2022.

Electronics manufacturing services (EMS) to grow 30% year-over-year in first half of 2022. Meanwhile, domestic manufacturers of global cellular IoT modules grew by 21% in the first half of 2022.

Global Cellular IoT Module Shipments Q2 2022 Share by Vendor  Research and photo provided by Counterpoint.
Global Cellular IoT Module Shipments Q2 2022 Share by Vendor Research and photo provided by Counterpoint.

A recovery was observed for the global cellular IoT module market.

After a decline in the first quarter, the global cellular internet everything module market will recover in the second quarter of 2022, the report shows.

“Over the past few years, the leading Chinese OEMs have grown significantly in size. They have experience in managing supply chain partners and manufacturing alliances,” said Ivan Lam, senior analyst at Counterpoint.

“Leading OEMs have brought in a number of supplier policies to maintain their cost competitiveness as they offer cost advantages.”

The top ten players within original design manufacturing and electronics manufacturing services accounted for two-thirds of the total IoT module outsourced production in the first half of 2022.

As noted by Counterpoint; Leading ODM/EMS suppliers of IoT module manufacturing hail from mainland China and Taiwan, such as Qisda and BYD Electronics. Dominant EMS companies like USI and Jabil are said to be helping leading OEMs in international expansion.

“Manufacturing costs are still a key part of an IoT module’s cost structure, apart from the cost of components. Top OEMs are growing rapidly in China, and they are likely to mostly hire manufacturing partners who have production facilities in the country,” he said. Mr. Lam said in the report.

“However, we have seen OEMs lease EMSs with global production sites such as manufacturing facilities in Mexico or Brazil to serve the North American and LATAM markets. We predict that manufacturing capacity utilization in India, Southeast Asia and LATAM will continue to grow due to the significant increase in IoT modules in these markets.”

“We expect outbound manufacturing shipments to grow at a CAGR of 17% between 2021 and 2026,” said Soumen Mandal, senior analyst at Counterpoint.

“Highly driven by innovation and digital transformation, the IoT module market will play a key role in IoT module production, especially in the enterprise segment. IoT module players present opportunities to generate recurring revenue, so they can focus on building platforms and services instead of manufacturing IoT modules.”

This is expected to be an opportunity for ODM and EMS players to expand their operations in the module market.

“However, Module players will seek vertical integration to increase control over the supply chain and even for small components,” said Mr. Mandal said.

“This will help IoT module players reduce costs and stay competitive in the market. As the demand in the market becomes higher, Leading OEM players are looking to expand their EMS supplier base to tap into global markets.”

IoT shipments increase by 2022.

Despite a tight supply chain as well as other global disruptions; The aforementioned global cellular Internet of Things module shipments grew by 20 percent in the second quarter of 2022.

China remains the world’s largest IoT market, contributing more than 50 percent of global demand. At the same time, North American and Western European markets saw growth, with India seeing the fastest growth, growing 264% year-on-year.


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