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Chip consumption, for example, isn’t going to decline. Semiconductor manufacturers are set to build 29 fabs over the next several years. Electronics manufacturing services (EMS) providers – especially those in healthcare — likewise expect end markets only to expand.
“Eighteen months ago, we had aspirations for growth in the life sciences space,” said Derek Kane, general manager of KMC Systems, a designer and manufacturer of medical instrumentation. “We have been an active participant in mobilizing capacity to support pandemic-related demand but we also put active deployment in place to expand within the market, including next-generation sequencing and cell and gene therapy.”
KMC is opening a corporate innovation center in Cambridge, MA, in conjunction with its parent Elbit Systems of America which provides products, solutions and support to the defense, homeland security, law enforcement and commercial aviation industries. The location was selected for its proximity to world-class engineering, education and research centers, but that’s only part of the story.

KMC Systems lab
Merrimack, NH-based KMC has a unique supply chain profile. Ninety percent of its suppliers are within 90 miles of its factory. When Covid-related demand surged for healthcare and test equipment, KMC’s lead times stretched to 28 weeks. Teams reviewed everything from materials costs to logistics to product redesign. By working with suppliers – often onsite — lead times were reduced to 8 weeks.
The global supply chain is so congested retailers are advising early holiday shopping. The B2B supply chain has been in a constant state of disruption for 18 months.
“Global supply chain issues continue,” one tech executive told the Institute for Supply Management last month. “Getting anything from China is near impossible — extreme delays. Microchip and circuit breaker shortages continue and are expected to continue into 2022.”
“The expansion of our offices to Cambridge puts KMC in a key location, being closer to our customer-base and keeping KMC on the pulse of emerging technologies and trends from our healthcare partners and industry leaders,” said Kane. Additionally, academic institutions are motivated to share research with businesses that can bring ideas to fruition.
Design-through-manufacturing services not only help customers – EMS companies can improve their margins though such services and deepen relationships with clients. The global EMS market is forecast to grow at a compound annual growth rate (CAGR) of 11.9 percent to reach $364.2 billion by 2026, according to Research and Markets. In 2019, the market stood at $165.3 billion.
The Cambridge center will also serve as a proving ground for technologies that can be applied across Elbit’s verticals. “We see technologies we can leverage across all markets such as advanced optical and imaging capabilities,” said Kane. “Likewise, some of the data-analytics that are used in healthcare may be applicable in non-healthcare markets.”
The global medical devices market is projected to grow from $455.34 billion in 2021 to $657.98 billion in 2028 at a CAGR of 5.4 percent, according to Fortune Business Insights. The rise in CAGR is attributable to Covid-19 but the market will maintain growth at pre-pandemic levels once the crisis is over.
KMC’s new office space includes 10,000 square feet of workspace designed for new engineering projects and an additional 50-60 Elbit America engineers. The space may also be leveraged for expanding Elbit America’s industry partnerships, including room for start-up companies looking for a Boston-based location. KMC’s local manufacturing capabilities can reduce new products’ time to market.
Elbit America and KMC are strategically planning for the future across its defense and medical divisions, according to Scott Baum, vice president for strategy and growth, Elbit Systems of America.

Scott Baum, Elbit Systems of America
“A number of technology advances that Elbit has made within our defense business are highly applicable in a number of the technology advances we are pursuing within our KMC Lifesciences intelligent lab automation business,” he said. “Some of Elbit’s leading innovation in electro optics, thermal management and data analytics are aligned to the innovation advances we are making with our KMC division.”
Research and Markets noted a few recent EMS expansions: In June 2021, EMS Microart Services joined forces with engineering firm Berlin KraftWorks Inc. to bridge the gap between product concept and production. Also that month, PG Electroplast approved an investment to enhance India’s electronics manufacturing capabilities.
Overall, U.S. manufacturing in October performed well for the 17th straight month, according to the ISM, with demand and consumption registering month-over-month growth in spite of continuing unprecedented obstacles and ever-increasing demand. The nation’s manufacturing index remains above 60; any number above 50 reflects expansion.
“Meeting demand remains a challenge due to hiring difficulties and a clear cycle of labor turnover: As workers opt for more attractive job opportunities, panelists’ companies and their suppliers struggle to maintain employment levels,” said Tim Fiore, chair of the ISM’s manufacturing survey committee. “Disruptions from Covid-19, primarily in Southeast Asia, continue to have an impact on many industry sectors.”
Congestion at ports in China and the U.S. continues to be a headwind and prices paid by manufacturers increased in October. “Demand remains at strong levels despite these challenges,” Fiore concluded.