---
title: "Contract Electronics Manufacturing Industry: Companies, KPIs & Risks"
description: "15 SEC filers are classified under the Standard Industrial Classification codes that describe the contract electronics manufacturing industry."
canonical: https://www.getswoopr.com/stocks/industries/information-technology/contract-electronics-manufacturing/
source: "Swoopr Investment: https://www.getswoopr.com"
---

# Contract Electronics Manufacturing Industry

## Direct Answer

15 SEC filers are classified under the Standard Industrial Classification codes that describe the contract electronics manufacturing industry, and their latest annual reports show $84.1 billion of combined revenue and a median operating margin of 6.0%. Investors should still evaluate its revenue model, industry-specific KPIs, valuation framework and the risks that can change the group's economics.

## Industry Overview

Contract electronics manufacturers build products designed by other companies, from phones and servers to medical and industrial devices, on thin margins and large volumes. Customer wins, utilization and working capital drive results. The first numbers to compare across companies here are revenue and backlog, operating margin and customer concentration.

## Key Industry Metrics

- **Revenue and backlog**: Sales and orders not yet delivered. Revenue follows customer product programs, so backlog shows visibility, but programs can be delayed or cancelled when end demand weakens.
- **Operating margin**: Profit as a share of revenue after materials and operating costs. Margins are thin because parts are passed through, so small changes in efficiency or mix move profit noticeably.
- **Customer concentration**: The share of revenue from a few brands. Losing a large program can reduce volume suddenly, so a high share raises risk that outweighs the scale advantage.
- **Inventory and cash conversion**: Parts and goods held, and how quickly they turn into cash. Contract makers buy components in advance, so heavy inventory and slow conversion tie up cash and risk write-downs.
- **Capacity utilization**: The share of factory and line capacity in use. High utilization absorbs fixed costs and lifts profit, while low utilization leaves idle plants and compresses already thin margins.

## Primary Macro Drivers

- **Customer product cycles**: When a customer launches or refreshes a product, assembly orders surge and then fade, so revenue and backlog follow customers' launch calendars.
- **Reshoring and supply chain shifts**: Customers moving production between countries create new plants and program wins for makers with capacity in the right places, affecting capacity utilization.
- **AI and server demand**: Servers and AI hardware have higher content and value per unit, so growth in those programs lifts revenue and backlog and can change the margin mix.
- **Component availability**: Shortages of parts delay builds and tie up inventory, so supply availability decides how much can be shipped and shows up in inventory and cash conversion.

## Major Risks

- **Thin margins**: Revenue is large relative to profit because most value is pass-through parts, so small cost or yield slips erase operating margin; watch operating margin by quarter.
- **Customer concentration**: A few brand customers account for much of revenue, so a program loss or insourcing can leave idle plants; watch top-customer share and utilization.
- **Inventory and working capital**: Holding parts for customers ties up cash and risks write-downs if demand drops; watch inventory days, cash conversion and any customer-linked reserves.
- **Geopolitical supply chain risk**: Tariffs, export rules or regional conflicts can force costly line moves or halt shipments; watch plant locations, sourcing exposure and commentary on shifting production.

## Industry Characteristics

| Characteristic | Profile |
| --- | --- |
| Cyclicality | Cyclical |
| Capital Intensity | Medium |
| Regulatory Intensity | Low |
| Industry Maturity | Mature |
| Geographic Importance | Global |

## Contract Electronics Manufacturing Filers in the SEC Record

15 companies with annual reports in the dataset are classified by the SEC in the Standard Industrial Classification codes 3672, 3679. Their latest fiscal years end between 2025 and 2026, and together they reported $84.1 billion of revenue. Median revenue growth over the prior year was 7.4%. Median operating margin was 6.0% and median net margin 3.2%. Median total liabilities were 49% of total assets, and 11 of 15 reported a profit in their latest year.

| Company | Revenue | Growth | Operating margin | Net margin | Year |
| --- | --- | --- | --- | --- | --- |
| [Jabil Inc](https://www.getswoopr.com/stocks/companies/jabil/) | $29.8 billion | 3.2% | 4.0% | 2.2% | FY 2025 |
| [Flex Ltd.](https://www.getswoopr.com/stocks/companies/flex-ltd/) | $27.9 billion | 8.1% | 4.9% | 3.2% | FY 2026 |
| [Vertiv Holdings Co](https://www.getswoopr.com/stocks/companies/vertiv/) | $10.2 billion | 27.7% | 17.9% | 13.0% | FY 2025 |
| [Sanmina Corp](https://www.getswoopr.com/stocks/companies/sanmina-corporation/) | $8.1 billion | 7.4% | 4.4% | 3.0% | FY 2025 |
| [Ttm Technologies Inc](https://www.getswoopr.com/stocks/companies/ttm-technologies-inc/) | $2.9 billion | 19.0% | 9.1% | 6.1% | FY 2025 |
| [Advanced Energy Industries Inc](https://www.getswoopr.com/stocks/companies/advanced-energy-industries-inc/) | $1.8 billion | 21.4% | 9.3% | 8.2% | FY 2025 |
| [Kimball Electronics, Inc.](https://www.getswoopr.com/stocks/companies/kimball-electronics-inc/) | $1.5 billion | -13.3% | 3.1% | 1.1% | FY 2025 |
| [Varex Imaging Corp](https://www.getswoopr.com/stocks/companies/varex-imaging-corporation/) | $845 million | 4.1% | -3.3% | -8.3% | FY 2025 |

The 8 largest of 15 by revenue. Source: each company's own annual report as filed with the SEC (XBRL data), figures in U.S. dollars. A company's SIC code reflects its main business as the SEC records it, so it can differ from how an index provider or analyst classifies the company, and a diversified group appears under only one code.

## Where to Go Next

The Contract Electronics Manufacturing guide describes how the industry earns money, what to measure and what can go wrong. To see how it compares, read the neighbouring industries in the same sector, then apply the same checks to a specific company.

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## Frequently Asked Questions

What are the main KPIs for the Contract Electronics Manufacturing industry?

Key performance indicators for the Contract Electronics Manufacturing industry include: Revenue and backlog, Operating margin, Customer concentration, Inventory and cash conversion, Capacity utilization. Which matter most depends on the company's model, so compare them across several companies rather than relying on one.

How cyclical is the Contract Electronics Manufacturing industry?

The Contract Electronics Manufacturing industry is cyclical, meaning its revenues and earnings tend to expand during economic expansions and contract during downturns. Investors should monitor leading economic indicators and interest rate trends when evaluating timing.

What are the biggest risks in the Contract Electronics Manufacturing industry?

The primary risks for Contract Electronics Manufacturing companies include: Thin margins, Customer concentration, Inventory and working capital, Geopolitical supply chain risk. Investors should assess each company's exposure to these factors and its track record of navigating them.

**[Swoopr Editorial Team](https://www.getswoopr.com/authors/swoopr-editorial-team/)**

Swoopr's editorial team produces independent investment education content reviewed for accuracy and clarity. We do not provide personalized financial advice. See our [editorial policy](https://www.getswoopr.com/legal/editorial-policy/) and [corrections policy](https://www.getswoopr.com/legal/corrections-policy/).