It is that time of year when our thoughts turn to 2018 and our (PIE) passive interconnect and electromechanical planning in markets we serve.
We typically take a broader market view and consider all sides of the electronics marketplace as we search for trends, perspectives and analysis to help shape our strategy and plans.
Here are some of the interesting statistics, analysis and observations we’d like to share with you.
Robust sales of electronic components can be expected to continue well into 2018, with expanding lead times looming as the only major threat on the horizon, says Nick Hawtrey, chief financial officer of Allied Electronics. New distributor total available market (DTAM) figures released by the Electronic Components Industry Association (ECIA) show strong growth in the first two quarters of 2017. Total sales of semiconductors, passive components, electromechanical products, and connectors in the Americas increased from $3.2 billion in Q4 2016 to $3.5 billion in Q1 2017 and $3.6 billion in the second quarter of this year. Gains have been notched among many sectors, notably automotive, industrial, medical, telecom networks, and avionics/military/space.
3Q’17 Global Electronic Equipment Growth Update; Japan Update; November PMI Leading Indicators; Worldwide Semiconductor Market Forecast – WSTS Update; N American PCB Business Growth Continues; Global Smartphones Sales up 3% in 3Q’17; Worldwide Wearables Market grew 7.3% y/y to 26.3 million units in 3Q’17; Global Smartphone Shipments will grow at 3.0% CAGR from 1.5 billion units in 2017 to 1.7 billion units in 2021; Worldwide Switching & Router Revenues exceed $11 billion in 3Q’17
The most frequent question right now being asked within the industry, is “how much longer will component shortages last?” Unfortunately, these shortages are forecast to continue into 2018, and possibly stretch beyond mid-2018, even for passive components.
Defence, automotive and aerospace sectors are further strengthening. They are both adding to, and driving the increased component demand across the market. For the availability of product to improve, the demand within the market needs to slow, or electronic component manufactures need to implement additional production facilities and capacity. This however is unlikely to happy quickly, especially in legacy or older technology components. Product availability and workable lead-times have been achieved with effective supply chain management and forecasting. However, there is always a danger that as these solutions expire and need to be renewed, we will see the impact of the extended lead-times and pricing increases. Forecasting, scheduling and underwriting stock within the supply chain can work to mitigate these risks as much as possible.
The forecast released today by the manufacturers’ authorised distributor (afdec) group within the Electronic Components Supply Network (ecsn) predicts that the UK & Ireland electronic component market will grow in the range 6.5%-to-10.5% in 2018, achieving a mid-point of 8.5%. Compiled from individual returns from the association’s member companies the Forecast further revealed that the market is likely to have grown by 17% in 2017, and Distribution’s share of the TAM (Total Available Market) in the UK will have grown to over 40%, encouraging the consensus opinion that the recovery in the manufacturing sector of the economy will remain strong and is likely to outperform the macroeconomic environment.
1. Tight supply, high prices to continue in DRAM market
2. AI’s influence on the semiconductor industry will expand
3. Numerous fabs in China will come on-stream.
4. OLED penetration in smartphones will increase from 28% to 33%
5. 5G deployment begins
6. Voice-based personal assistants will drive IoT expansion
7. Micro LED will emerge as a rival to OLED
8. The rise of edge computing enables local processing of AI applications
9. Customised and specialised servers for AI will boost server ODMs.
10. Continued push towards autonomous driving technology.
11. The rise of EVs will drive new battery technologies
The UK & Ireland electronic component market is forecast to grow in the range 6.5%-to-10.5% in 2018, achieving a mid-point of 8.5%, according to figures released by UK distribution association afdec. According to market analyst Aubrey Dunford, the UK and Ireland distribution market will grow 17% in 2017, and the distributors’ share of the overall Total Available Market (TAM) in the UK will have risen to 40%.
Let’s talk about your plans for 2018 and especially if you are looking to move into new markets, seeking growth and need sales and marketing representation.