A region that’s long been the center of gravity for the global electronics supply chain, Asia-Pacific (APAC) continues to handle much of the world’s electronics production as 2026 reaches its midpoint. China still has the manufacturing scale, Taiwan remains central to semiconductors and Vietnam continues to serve as a major assembly base. India is also gaining ground in electronics manufacturing, while Southeast Asia is taking on more testing, packaging and specialized production.
The market is also going through some changes. Demand related to AI, data centers, electric vehicles and advanced manufacturing is pushing new investment into APAC. At the same time, tariffs, material constraints and capacity limits are making sourcing decisions more complicated.
Distributors are working with a lot of moving pieces in this evolving, competitive environment. Customers need access to APAC’s manufacturing base, but they also need help finding available components, weighing country risk, managing tariff exposure and adjusting sourcing plans.
Expanding Production Markets
According to Mordor Intelligence, the Asia-Pacific electronics manufacturing services market is expected to exceed $416 billion this year, up from roughly $386 billion in 2025. Looking further out, the market is expected to exceed $592 billion by 2031, and is posting a 7.32% compound annual growth rate (CAGR).
Mordor says the growth is being driven by a broader shift toward multi-country production footprints, more automation and deeper process know-how across the region. It notes that original equipment manufacturers (OEMs) are adding new production lines in India, Vietnam and Thailand, while China and South Korea continue to invest in more advanced semiconductor and electronics manufacturing capabilities.
Some of the faster-growing categories include printed-circuit-board assembly, which accounted for 43% of the region’s electronics manufacturing services market in 2025. Electromechanical and box-build integration is expected to grow at an 8.21% CAGR through 2031, while automotive applications are projected to grow at a 9.11% CAGR during that same period.
Looking ahead, distributors serving APAC customers will likely see continued demand for power modules, battery-management systems, high-frequency boards and the components that support more complex production programs.
New Country Choices
Today, Asia accounts for more than 65% of global electronics output, but U.S.-bound imports are facing higher tariffs and longer lead times, according to Titoma. Thanks to its deep supplier network, China remains the largest manufacturing base, although rising wages and tariffs are eroding some of that long-held advantage.
Titoma says other countries are gaining ground. For example, Vietnam has become a major electronics exporter, yet it still depends heavily on imported components and foreign-owned tier-one suppliers. India is positioning itself as a global electronics manufacturing hub—with higher local value addition and more domestic component production—but the country is still addressing key infrastructure and yield issues.
Chip Investments Expand Across APAC
Strong global chip demand is driving some new investment across Southeast Asia and India this year, Astute Group reports. Governments and manufacturers are trying to reduce supply chain concentration and secure future component availability. In the near term, those investments could expand semiconductor packaging, testing and electronics assembly across the region.
Vietnam is one example of this. The country’s electronics exports reached about $164 billion in 2025 and are projected to reach $200 billion in 2026. Samsung is also planning to invest $1.5 billion in a semiconductor testing facility in Thai Nguyen province, with operations expected to begin in November 2027.
“The important development here is not a single factory announcement but the gradual spread of semiconductor capacity across multiple countries,” says Damian Semple of Astute Group. “Supply chains remain exposed to material shortages and regional concentration, so buyers should continue monitoring lead times and qualifying alternative sources before demand tightens further.”
