Power availability will play a significant role in real estate design and facility selection within the electronic manufacturing services (EMS) industry, which depends heavily on reliable, high-capacity and clean power for everything from basic assembly to surface mount technology, cleanroom operations and testing.
According to a Cresa Research EMS industry report, EMS facilities typically require significantly more power than traditional industrial warehouses and distribution buildings. In addition, cleanrooms, HEPA filters, and temperature/humidity-controlled environments require strong HVAC systems and electrostatic discharge (ESD) protection systems often require constant monitoring and grounding infrastructure tied to facility power, noted the report. In-house labs can mandate dedicated circuits, redundant power systems, backup generators or uninterrupted power systems (UPS).
To appeal to EMS, properties must support a sufficient power supply from the utility, ideally with expandable capacity and in areas with stable grids and more affordable electricity. Older industrial buildings may require retrofitting, said the report.
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The EMS industry was hit hard by the pandemic, with factory shutdowns, labor shortages and semiconductor scarcities. However, since 2021, the sector has rebounded strongly in response to consumer demand for automotives, medical devices and consumer electronics. The global EMS market had a value of $477 billion in 2023 and is expected to grow at a 6.2% compounded annual rate through 2031.
Both original equipment manufacturers and EMS firms began reshoring and nearshoring operations to reduce dependencies on Asia-Pacific countries, which has resulted in growth in Mexico, Eastern Europe and the United States, as well as increased investment in supply chain visibility and multi-sourcing strategies, said the report. Investment also has focused on advanced manufacturing technologies to improve efficiency, reduce downtime and make operations more agile, according to Cresa.
Many large or highly specialized EMS companies are increasingly opting for build-to-suit (BTS) due to the complexities of finding buildings that meet their need for automation integration, secured facilities, cleanrooms, power needs and other customizations. Smaller and mid-sized EMS providers often rely on leasing due to flexibility and cost effectiveness. Other firms in the sector are taking a hybrid approach, initially leasing with options to expand or buy, said Cresa.
Additionally, the report noted EMS companies are showing a preference for modern, tech-ready manufacturing facilities and hybrid spaces that combine production, assembly and distribution. Many EMS companies are seeking affordable locations outside primary industrial hubs and prioritize facilities with strong parking ratios to meet worker demand, particularly if the operation runs multiple shifts.
The main property types EMS companies typically use include single-story manufacturing buildings with high ceiling spaces; flexible buildings that combine office, lab and light manufacturing areas often near engineering talent or universities; as well as warehouse and distribution buildings to handle fulfillment, reverse logistics and spare parts distribution.
Many EMS companies require secured facilities with surveillance and physical controls, according to the report.
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Kristen Smithberg
Kristen Smithberg is a Colorado-based freelance writer who covers commercial real estate, insurance, benefits and retirement topics for BenefitsPRO and other industry publications.
