Electronic Manufacturing Supply Chain Development Report

Overview

    According to the IPC (Institute for Printed Circuits)'s Global Electronic Manufacturing Supply Chain Report released in May 2025, electronic product manufacturers are facing the challenge of rising costs, despite stable overall demand. The report shows that although there are concerns about tariffs and rising material and labor costs, demand in the electronics industry remains strong. The new orders index has expanded this month, further indicating continued demand growth.

Material and Labor Cost Pressure

    Material costs continue to rise and are expected to further increase in the coming months. According to the report, most electronic manufacturers anticipate that material costs will continue to rise. Manufacturers are generally facing rising material prices, which are putting significant pressure on profit margins. While labor cost pressure has eased, with the related index falling to the lowest level on record, a significant number of manufacturers still report rising labor costs. The rise in labor costs is mainly attributed to the tightening of the global labor market and rising wages in certain regions.

    However, the profit margin outlook index has fallen to a low point, reflecting the growing expectations of manufacturers for short-term pressure. This trend suggests that despite ongoing demand growth, manufacturers must strike a balance between cost control and production efficiency.

Tariff Pressure and Policy Adjustments

    Tariff pressure remains a major challenge for electronic manufacturers. The report particularly highlights the issue of passing on tariff costs, especially regarding how to transfer these costs to consumers. The survey reveals that 68% of electronic manufacturers expect the new tariffs to be borne by consumers. In particular, in the European market, the proportion of manufacturers that did not advance shipments due to potential tariff risks decreased from 65% in February 2025 to 53% in May 2025. This change is especially significant in the European market, where the proportion of companies that did not advance shipments fell by nearly 40%. Meanwhile, 19% of companies stated that they had advanced 26%-50% of their shipments. This shows that manufacturers are more actively adjusting their production and shipment plans to cope with tariff risks.

Future Market Expectations and Investment

    In the next six months, shipments, capacity utilization, and backlog orders are expected to rise. However, profits are still expected to decline, primarily due to rising material costs and labor costs that have not been fully controlled.

    The report also mentions that 53% of manufacturers say tariff uncertainty is delaying their investment or procurement decisions, reflecting that the uncertainty of trade policies is causing significant strategic planning pressure for businesses.

Conclusion

    Overall market trends indicate that while global demand for electronics remains strong, manufacturers are still facing a series of challenges, including rising costs, tariff policy uncertainties, and labor market pressures. In this environment, flexible adjustments to production and supply chain strategies, as well as optimizing cost structures, will be key for businesses to maintain competitiveness in the coming months.

    The data in the report also shows that manufacturers in the Asia-Pacific region have a more optimistic outlook for the future market, while businesses in North America need to pay more attention to external policy changes and cost control to maintain a competitive position in the global market.

    In the coming months, electronic manufacturers will continue to closely monitor changes in tariff policies and material costs and adjust their production and supply chain strategies to respond to the ever-changing market environment.

Report Data Source

    This report is based on data from IPC's Electronic Manufacturing Status Survey conducted from April 15 to 30, 2025, combined with current industry dynamics and market expectations.