Global Electronic Components Outlook 2023

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This research analysis is to help our readers understand the new industry-standard and share an analysis on the global electronic components market.  It is a toiling attempt unveiling key opportunities and market trends shaping the electronic components technology and market at large. Here in this article we try to bring viable and trusted market forecasts, including those for the overall size of the global Electronic Components market in terms of revenue.  Electronic Components Outlook 2022 is a detailed overview of the key elements of the industry such as drivers, restraints, current trends of the past and present times, supervisory scenarios, and technological growth.

Lately the global Electronic Components market has been changing design probabilities considering specifications, cost impacting newer revenue models. Like most suppliers also relying on ready-to-market strategies and direct selling. The value at global and considerable regional stages has been impacting given the shift of designing and fabricating Electronic Components.

The Dominators in the Electronics Components Market

In the recent times Merger and Acquisitions (M&A) has seen a rise; given the technological advancements and added focus on technology collaboration. Leading companies like Texas Instruments,

Murata, ABB, STMicroelectronics, NXP Semiconductors, Kyocera, Omron, Amphenol, ON Semiconductor, Infineon Technologies, Samsung Electro-Mechanics, TDK Corporation, Analog Devices, Inc., Molex, Vishay, Qorvo, Nippon Mektron, Vectron, Yageo, Skyworks, Taiyo Yuden Co., Ltd. Eaton Corp., TE Connectivity Ltd., Littelfuse, Panasonic Corporation, KEMET, Nippon Chemi-Con, Microchip all have undergone newer marketing strategies and the rate of M&A has also been floating across the industry-leading companies.

Quarter By Performance

Q4 2021 shows continued optimism for sales growth in both quarters. The share of survey participants expecting growth in Q3 is 68 percent followed by continued optimism in Q4 but with 51 percent of respondents. Only between 2 percent and 4 percent of participants expect a decline of between -1 percent and -3 percent in Q3 and Q4. The remaining survey participants expect stable revenues for the second half of 2021.

Publicly traded distributors reported at the end of their most recent quarters – calendar Q2 – that they’re shipping inventory almost as soon as they receive it.  The shortage is likely a positive for new customer growth in the channel.

The more modest growth picture for the remainder of 2021 should offer some relief to suppliers and supply chain managers challenged by demand that has outstripped supply, resulting in inventory shortages and significantly extended lead times, said Ford. Two industry players recently cited DRAM lead times extending to a year.

Supply constraints in one category have a ripple effect on demand in other areas, Ford added.  The semiconductor shortage has spilled over into the IP&E market. Within individual market segments avionics/military/space and medical equipment have the brightest outlook for September followed by telecom networks and industrial electronics.

Expectations for consumer electronics and telecom mobile phones are essentially flat. Automotive electronics saw the biggest drop in expectations for September compared to August.

Moderating sales expectations should reduce lead-time pressure and ECIA reported significant easing on product lead time across all categories moving from July to August.  Discrete semiconductors and capacitors remain under the most pressure.

In a separate question on the level of inventories, survey participants reported low to extremely low inventories for as much as 93 percent of component categories. DRAM and data flash memory were under the greatest pressure. This research was published by EPS NEWS.

Electronic Components Statistics By Market Share and Technology

Discrete components continue to achieve the strongest index levels among the component subcategories as they lead the group in January and remain strong with an index score above 120 looking toward February. Electro-Mechanical components come in just behind Discrete Semiconductors in January but then drop below 115 in February expectations.

In the next tier MCU/MPU and Analog/Linear ICs deliver stable, optimistic results with index scores between 113 and 118 and January and February. Capacitors are another bright spot with index measures above 110 in both months. Resistors, Inductors, and Memory ICs see the lowest scores but still all solidly above 100 looking toward February. The overall actual component sales sentiment index has now register above 100 for 18straight months dating back to August 2020. Comparing between the three groups surveyed, Distributors report the greatest optimism in January and actually see improved expectations in February.

Global Electronic Components Outlook 2023
Electronic component leadtime survey December 2021 to January 2022 comparison; source: ECIA

On the other hand, Manufacturers report solid 100+ sentiment in January that then collapses below 85 in February – the only negative expectation among all three groups. Manufacturer Representatives reported stable expectations above 110 for both months. The reason for the strong divergence in expectations for February between Manufacturers and the other groups is not clear. Perhaps, the Manufacturers may be concerned about economic and inflationary challenges that may slow end-market demand and soften long term bookings.

Only two end markets report an expectation of sales sentiment below 100 for January and February – Consumer Electronics and Mobile Phones. Computer expectations come in slightly above 100 in both months. Again, the softness in these areas reflects a typical seasonal pattern for these markets. Automotive Electronics leads with strong sales sentiment above 125 in both January and February. Industrial Electronics scores above 120 in January and then dips slightly below in February.

Electronic Components Outlook in 2023

That’s according to an analysis of data from Supplyframe, an industry ecosystem catering to businesses that design, source, market, and sell products across the global electronics value chain. Lingering factors heading into 2023 could include extended lead times, geopolitical uncertainty, and elevated logistics and labor costs, though pressures do seem to be easing.

“The electronic component supply chain is improving, but slowly and unevenly,” Supplyframe CEO and founder Steve Flagg said in a release Aug. 11. “The multitier electronics supply chain exists within a complicated and volatile environment in which ever-evolving, unforeseen events continue to impact capacity, costs, lead times, and other considerations. Constraints and shortages are not over. And a rebalancing of inventories and component market corrections is in play.”

The findings, part of Supplyframe’s Q3 Commodity Intelligence Quarterly (CIQ), forecast 52% of all electronic component lead time dimensions to decline or stabilize in the third quarter. The analysis indicates shortening lead times, stabilizing prices, and lower demand for select electronic components. Capacitor and resistor demand shrank by 12% compared with the previous quarter. Global demand was down 11% month-over-month in June versus historical 4% increases, with Asia-Pacific and the EMEA region declining by 11% and 14%, respectively. Overall memory demand dipped 6% from the Q1 to Q2 and is forecasted to decrease again in Q3 by 2%.

Global Supply Chains in 2023

Tight conditions in the global supply chains for electronics parts and components will continue well into 2023 as buyers experience “grim” challenges such as low supplies and high costs, according to the electronics industry analyst firm Supplyframe.

The California-based company said that continuing challenges at the beginning of this quarter suggest that there will only be pockets of relief through the remainder of 2022 and into 2023 for many commodities. In the meantime, the impacts will include shortages of resin feedstocks and additives, increasing costs for fuels and metals, and challenges related to the affordability and availability of labor and freight capacity. “Geopolitical uncertainty and wide-ranging impacts from the Russian invasion of Ukraine, persistent global inflation, and recurring Covid-19 outbreaks continue to wreak havoc and test beleaguered industry supply chains,” Supplyframe CEO and founder Steve Flagg said in a release.