Electronic components market insight & trends…
01 January 2022
OEMSecrets_Jan22_Electronic components market insight & trends…
New data shows positive & increased opportunities for electronics in various industries – even with shortage & price uncertainty still affecting the supply chain. With the growing need for stable supply chain networks, business research firm, OEMSecrets has identified 4 key trends that reflected this recurring theme in 2021…
This viewpoint was originally featured in EPDT's H1 2022 Electronics Distribution supplement, included in the January 2022 issue of EPDT magazine [read the digital issue]. And sign up to receive your own copy each month.
OEMSecrets analysts have selected these trends and extrapolated the following insights from big data analysed over the past 3 months in its search engine for their influence on buyers and their ability to disrupt key functions across businesses.
1. Demand insights
During the last quarter (August-October 2021), OEMSecrets has seen an increase in demand for parts with low stock, which is an indication that the industry is experiencing continued electronic parts shortages. Semiconductors (diodes, ICs and sensors) and passives (transistors, resistors and multi-layer ceramic capacitor or MLCCs) have been the worst hit, with distributors displaying low stock levels with long lead times on additional stock. Although manufacturers have increased capacity and supply to their distributors listed on the OEMSecrets search engine, demand still outstrips supply, which in turn is perpetuating pricing uncertainty along the supply chain.
2. Price uncertainty dynamics
There has been a gradual increase in prices for products in various categories, including microcontrollers, power converters, LEDs and connectors. The price uncertainty has been driven by shortages along the various levels of the supply chain, and according to OEMSecrets, it starts way down at raw materials, especially for products driving green technology, such as electric vehicles (EVs) and battery components. The company believes electronic parts prices are on the up for the foreseeable future.
3. Revenue insights
In the months of September and October 2021, OEMSecrets saw strong demand for semiconductors and passive. The revenue data reflect an increase based on estimated figures shared with the company by top distributors over those two months. Restraints such as shortages barely affected revenue growth, as suppliers also increased capacity. These revenue insights are backed by research undertaken by market analysis firm, Market Research Future, who expect the electronics components market to be worth more than $355 billion by 2022.
4. Technology insights
The data effectively highlighted that there has been an increased shift of preference to touch input technology, pushing up demand for display devices, as consumers prefer information in visual form. Touchscreens have become the gold standard on devices used today.
The adoption of IoT & industrial IoT technology has increased demand for sensors and Wi-Fi components, driving opportunities for growth in industries like medical, automotive, industrial, security and aerospace, among others.
These insights have been derived from major suppliers, including Abracon, Analog Devices, Diodes Inc., FTDI, Infineon, Kyocera AVX, Littelfuse, Maxim Integrated Products, MEAN WELL, Microchip Technology, Molex, Murata Power Solutions, Nordic Semiconductor, NXP Semiconductors, Omron, onsemi, Schurter, Sensirion AG, STMicroelectronics, Taiwan Semiconductor, TE Connectivity, Texas Instruments and Vishay.
“During the past 3 years, the global market has been affected by various factors, and as a result, we are seeing trends constantly shift, with an increase in demand and shortages of various product types,” said Sam Cowley, founder of OEMSecrets.
“As a result, we recommend that buyers and design engineers in the electronics components industry supply teams consider the following:
• Work with suppliers to identify indicators of demand surge and develop fallback solutions for smooth project continuity in case of shortages;
• Create price uncertainty pointers that will help buyers prioritise parts acquisition for their projects;
• Use comparison websites as research tools and analyse markets behaviours.”
The company’s latest global market insight indicates that the compound annual growth rate in 2020 was 0.7% but, based on the current market climate, expect a 6.4% increase by the year 2025, with a market value of US$367 billion.
Since 2010, OEMSecrets.com has focused on improving the way electronic parts and components are sourced and purchased online by bridging the gap between suppliers and buyers. The price comparison site offers a free part search tool that helps users save time and money when sourcing components online. Upon entering a manufacturer part number, users are quickly able to compare distributor prices and inventory from suppliers including RS Components, Farnell, Mouser, Future, Avnet, Arrow and many more.