UK electronics manufacturing: three insights to shape 2022

2021 dramatically reshaped the way the UK electronics manufacturing sector does business – in no small part due to the dual pressure of the global pandemic and Brexit.

Yet, despite the challenges of the last 12 months, many in the industry feel that 2022 presents the perfect opportunity in the months ahead for electronics firms to dust themselves down and demonstrate why the UK manufacturing ecosystem is greater than just the sum of its parts.

From dealing with the supply chain fallout to engaging with innovation hubs, what are the insights that will shape electronics manufacturers’ priorities in the coming year?

1. Increased on-shoring of UK electronics manufacturing

Rising costs and lengthy delays have been a common thread running throughout 2021. As a result, electronics manufacturers have begun to question the fundamental risk and reward of globalisation. In the months ahead, they must prepare for the reality of long-term disruption, increasingly strained geopolitics and an almost inevitable rise in economic nationalism as countries scramble to kickstart their own post-pandemic economies.

Consequently, OEMs (Original Equipment Manufacturers) will use 2022 to review whether they should be sourcing products closer to home and, importantly, whether this can be done without compromising on price, quality and delivery.

For progressive UK electronics manufacturers with the ambition to innovate and compete, on-shoring and localisation present great opportunities and OEMs have learned it can be quicker and smoother to use local manufacturing systems in the current circumstances.

It’s now up to EMS (Electronic Manufacturing Services) companies to find creative solutions to tackle these macro-level challenges and position themselves to support the changing needs of OEMs not just in the short-term, but far beyond the immediate impact of the pandemic and Brexit.

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2. The rise of electronics manufacturing as a bolt-on service

2022 is finally time for electronics manufacturers to deliver on the end-to-end services they’ve promised for years and allow clients to tap into in-house expertise, ranging from design through supply chain management to fulfilment.

While most EMS companies in 2021 claim to offer a full range of services – from prototyping to ramp-to-volume production to end-of-life management – the reality is that most of the industry still expects OEMs to provide solutions for almost everything within that sphere. In a lot of cases, it’s what we’d call a “build-to-print” environment, where all the intelligence and control around a product is driven by the OEM.

Instead, the industry’s ecosystem needs to put its words into action in 2022 and deliver a ‘bolt-on’ service at the point of product conception to guide clients during the design process, add value through experience and apply engineering knowledge.

3. The rush to climb aboard the UK’s space race and beyond

There’s no doubt that Britain’s recovery following the pandemic will reach far into the months – if not years – ahead. However, the electronics manufacturing industry remains an integral part of our economy and is well placed to support a number of vibrant sectors which will require a strong manufacturing base at home to drive economic growth.

The UK’s space industry has seen unprecedented growth, especially north of the border. With more than 80 leading space companies headquartered across Scotland alone, the value of the sector is expected to rocket across the next 12 months, and exceed £4 billion by 2030.

2021 has also seen a spate of technological breakthroughs in the sensing, imaging and IoT technology sectors – many of which have been spurred as a direct result of the pandemic. Added to this, projects and initiatives like the Censis Innovation Centre at Glasgow University are helping to stimulate a new wave of startups who are flooding the market with lots of groundbreaking and exciting technologies. In the year ahead, engagement with innovation hubs like these will play an important role in ensuring that the electronics manufacturing sector continues to flourish across the whole of the UK.

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Looking towards the year ahead

Progressive electronics manufacturers are well placed in 2022 to not just answer the problems posed by the last 12 months, but support an array of emerging and thriving sectors through early-stage alignment and proactive engagement. Get this right and the year ahead offers huge promise to secure long-term success and security, not just post-pandemic but for the decade ahead.

Written by John Cameron, managing director of CB Technology

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