Issue link: https://iconnect007.uberflip.com/i/1542458
JANUARY 2026 I SMT007 MAGAZINE 7 blies and advanced packaging work into EMS supply chains.⁴ Manufacturers prioritized region- alization and resiliency, for example, "China-plus- one," nearshoring to Mexico and Southeast Asia, and reshoring incentives, so OEM sourcing strate- gies tightened around speed, risk reduction, and onshore capacity.⁵ If these shifts in supply chain toward Mexico affect your business, be sure to read our November issue of SMT007 Magazine, which details this scenario in depth. How did EMS companies evolve and how were they reshaped in 2025? On the factory floor, AI- and analytics-driven process control, the broader adop- tion of Industry 4.0 automation, and investments in back-end test and assembly equipment have raised productivity while shifting labor profiles toward data and process engineers. Our customers are building out the AI infrastruc- ture, while we increasingly bring AI capabilities into our business operations. Regarding investment, EMS providers moved up the value chain—offer- ing design-for-manufacturability, system assembly, and co-development services—to capture margin and counter commoditization. The defining feature of 2025 was making strategic M&A and CapEx focused on higher-mix, higher-value offers. In 2026, you can expect a shift from recovery- driven growth to structurally driven expansion, with competitive advantage increasingly defined by capability depth rather than footprint alone. We'll see more concentration in AI infrastructure, automotive electronics, industrial automation, and medical devices, all of which require higher reliabil- ity, tighter traceability, and more complex assem- blies, with a product mix trending toward lower volumes and higher complexity. Expect trade dynamics to keep regionaliza- tion central to OEM sourcing strategies. This is a good time to assess your procurement and inven- tory management processes. Operationally, 2026 will mark a transition from "pilot" to scaled deploy- ment of AI in manufacturing. Capital investment will favor advanced SMT, inspection, and test platforms tightly integrated with MES and ERP systems. Small Language Models (SLMs) in more tightly focused application-specific roles, like AOI results analysis, will be on the rise. SLMs will help us make N O L A N ' S N OT E S sense of the raw disconnected data we're gather- ing, and we'll see whether this data can be further monetized. In this month's issue, we look back at 2025 as a global inflection point. We report on the impact of manufacturing, Europe's changing market, where AI is leading with respect to SLMs, and what's ahead for the industry as well. We also take a look at our top reads of 2025, report on the winners of the Hand Soldering World Championship, Zuken's wire harness efforts, and feature the continuing series from Stan Rak on EV technology. To keep up with the changes ahead, you'll see some changes to our magazine content as well. SMT007 Magazine will feature more content about advanced electronics packaging, while PCB007 and Design007 Magazines will blur the line between design for manufacturability with the launch of I-Connect007 Magazine. It looks to be a positive and exciting year ahead.SMT007 References 1. "I have an eVTOL in my carport," by Tim Lum, youtube.com. 2. "Driving Growth and Transforming the EMS Industry," with Jack Calderon and Chaim Lubin, SMT007 Magazine, February 2025. 3. Electronics Manufacturing Services (EMS) Market Size and Future Outlook, Fortune Business Insights, Dec. 1, 2025. 4. "300mm Fab Outlook Report: Long-Term Outlook: Detailed Analysis to 2028, High- Level Forecast to 2030," SEMI. 5. "Global Semiconductor Equipment Sales Pro- jected to Reach a Record of $156 Billion in 2027, SEMI," SEMI, Dec. 16, 2025. Nolan Johnson is managing editor of SMT007 Magazine. Nolan brings 30 years of career experience focused almost entirely on electron- ics design and manufac- turing. To contact Johnson, click here.