As industries become more interconnected and data-driven, the risk of cyberattacks targeting intellectual property, production processes, and supply chains has never been higher.

In fact, according to a report by Omdia, 80% of manufacturing companies have experienced some form of data or cybersecurity breach over the past year. More worryingly, only 45% of surveyed manufacturers have adequate cybersecurity defences.

From data theft and sabotage to corporate espionage, electronics manufacturing service (EMS) providers are especially at risk. They routinely handle highly sensitive designs and proprietary information, and without robust IT security measures, they face increased exposure to data breaches that could compromise operations, disrupt supply chains, and erode customer trust.

To protect against these growing threats, electronics manufacturing companies must prioritise cybersecurity to safeguard their interests.

Threats Faced by Electronics Manufacturing Service Providers

EMS providers provide manufacturing services for a variety of industries. These include highly sensitive electronic components used in building management, healthcare, and the Internet of Things (IoT).

Given the proprietary nature of these components, EMS companies are prime targets for cybercriminals seeking to steal intellectual property, sabotage production lines, or compromise firmware integrity.

Below is an overview of the key cyber threats affecting EMS providers and their potential impact:

The Importance of Cybersecurity in EMS

The risks associated with cyber vulnerabilities extend beyond financial losses—they threaten business continuity, regulatory compliance, and product integrity. For EMS providers, protecting sensitive intellectual property and proprietary designs is essential for maintaining client trust and ensuring long-term industry competitiveness.

To mitigate these risks, electronics manufacturing companies must adopt advanced IT security measures, including multi-factor authentication, network segmentation, real-time threat detection, and encryption protocols. Manufacturers can safeguard their operations, protect their intellectual property, and maintain a competitive edge in an increasingly hostile cyber landscape by prioritising cybersecurity.

Protecting Intellectual Property (IP) in Electronics Manufacturing Services

Intellectual property theft, or IP theft, is a major problem for manufacturers, especially those in the tech sector. Competitors or counterfeiters can replicate stolen product designs and trade secrets, flooding the market with unauthorised copies. This causes revenue loss and dilutes brand value and market positioning.

Additionally, IP theft can compromise product integrity. Suppose tampered firmware or unauthorised modifications make their way into production. In that case, it can lead to faulty or insecure devices, a critical concern in industries like healthcare, automotive, and aerospace, where safety, reliability, and compliance are non-negotiable.

For example, in PCB (Printed Circuit Board) manufacturing, intellectual property is embedded in every stage of the design and production process. PCBs serve as the foundation for all electronic devices, from consumer electronics to industrial automation systems, and their design is often the result of years of research and development.

When a PCB design is stolen, counterfeit manufacturers can replicate it and produce unauthorised copies without the original manufacturer's rigorous quality controls and testing processes. This can result in inferior, unreliable, or hazardous electronics entering the market.

Beyond counterfeiting, IP theft in PCB manufacturing can also introduce security vulnerabilities. If a compromised PCB design is altered before production, malicious actors can embed hardware backdoors or malicious code that remains undetected until the device is deployed.

This poses a major risk in industries like telecommunications, defence, and IoT (Internet of Things), where even a single compromised component could be exploited for espionage, data breaches, or operational sabotage.

To mitigate these risks, EMS providers must implement strict cybersecurity measures throughout the PCB design and manufacturing process, including:

• End-to-end encryption of PCB schematics to prevent unauthorised access.
• Access control policies that limit who can view, modify, and distribute PCB designs.
• Supply chain security protocols to ensure that trusted, compliant partners handle manufacturing.
• Regular security audits to detect unauthorised alterations or potential vulnerabilities.

Without strong cybersecurity measures, IP theft in PCB manufacturing can have devastating consequences, affecting not just businesses and profits but also consumer safety and national security.

IT Security in Electronics Manufacturing Supply Chains

Given today's globalised economy, complex supply chains have become a fact. Unfortunately, this has also provided cyber criminals and hackers with opportunities to exploit a variety of vulnerabilities.

One of the most alarming threats is firmware compromise, where attackers modify low-level code within hardware devices, embedding backdoors or malicious scripts that remain undetected until deployment. These vulnerabilities can then be remotely exploited to disable systems, extract sensitive data, or disrupt critical infrastructure.

Additionally, supply chain attacks often target logistics and procurement platforms, where cybercriminals manipulate order processing systems to reroute shipments, steal intellectual property, or delay production. A ransomware attack on a key supplier can bring an entire electronics manufacturing operation to a standstill, resulting in missed deadlines, financial losses, and reputational damage.

To mitigate these risks, EMS providers must adopt a multi-layered IT security approach that extends beyond their internal networks to include third-party suppliers, logistics partners, and software vendors. Implementing end-to-end encryption, secure firmware validation, and real-time threat monitoring can help prevent supply chain vulnerabilities from escalating into full-blown security breaches.

To prevent supply chain-related cyber risks, EMS providers must establish strict security protocols and vetting processes for their vendors, including:

• Comprehensive vendor risk assessments to ensure suppliers follow strict cybersecurity protocols.
• Secure software supply chains with cryptographic signing of firmware and software updates.
• Traceability measures to track and authenticate components throughout the manufacturing process.
• Regular penetration testing to identify weaknesses in third-party integrations.

Without robust supply chain security, electronics manufacturers risk exposure to counterfeiting, cyber sabotage, and regulatory penalties, which can damage trust and disrupt production.

Preventing Production Disruptions in Electronics Manufacturing Services

On average, production disruptions cost businesses roughly $228 million in lost revenue. For electronics manufacturing service providers, where precision, speed, and efficiency are critical, any downtime can be catastrophic.

Beyond immediate financial losses, operational shutdowns, supply chain delays and customer contract breaches can lead to long-term reputational damage. A significant threat to production continuity is ransomware, where hackers encrypt critical systems and demand payment to restore access. If an EMS provider falls victim to a ransomware attack, assembly lines can halt, preventing the manufacture of key electronic components. This would mean delayed shipments, missed client deadlines, and millions in lost revenue for electronics manufacturers.

To mitigate these risks, EMS providers must strengthen their IT security measures and ensure continuous monitoring of production networks. Strategies include:

• Network segmentation is used to isolate production systems from IT networks, preventing malware from spreading.
• Real-time anomaly detection to identify irregular activity that could signal a cyberattack.
• Automated data backups and disaster recovery plans to ensure rapid recovery in the event of an attack.
• Strict access controls to limit employee permissions and reduce insider threat risks.

Without strong IT security protocols, electronics manufacturers risk costly downtime, quality control failures, and irreparable damage to customer trust. In an industry where efficiency and reliability are key, a secure production environment is just as important as innovation and speed to market.

Securing the Future of Electronics Manufacturing with Strong Cybersecurity

Cybersecurity has become essential for electronics manufacturing service (EMS) providers. It is critical in protecting intellectual property, securing supply chains, preventing production disruptions, and ensuring compliance with industry regulations. As cyber threats continue to evolve, EMS providers must take a proactive approach to safeguarding their operations.

Manufacturers can mitigate risks, maintain operational continuity, and protect their reputations in a competitive market by implementing robust IT security measures.

Why Partner with PCI for Cybersecurity-Ready EMS Solutions?

• Comprehensive IT security integrated into electronics manufacturing processes.
• Strict IP protection measures to safeguard proprietary designs and prevent counterfeiting.
• Proven expertise in secure supply chain management and vendor risk mitigation.
• Advanced cybersecurity protocols to prevent ransomware, malware, and insider threats.
• Regulatory compliance assurance, ensuring alignment with global cybersecurity standards.

Choosing an EMS partner with a strong cybersecurity framework is essential to staying ahead of emerging threats and industry challenges. Partner with PCI to ensure your products are manufactured securely, efficiently, and with the highest level of protection.