Market Review
Little change for 2016
If we think back a year ago, to the end of 2014 looking forward to 2015, we were contemplating the year ahead with hope and optimism for a growth in the market. Unfortunately, it didn’t happen quite like that and it proved to be a tough year for many in the industry. But what will 2016 bring? We catch up with some of the electronics sector’s key figures to get their thoughts on the past 12 months and the year to come
I
t’s safe to say 2015 was tough, with less than one per cent market growth compared to 2014. It seems the market is still in recovery, which is proving to be slowing down somewhat since the sector experienced an upward trend in 2013 after the slow years of 2011 and 2012. This time last year, there were concerns about 2015 and how the market would cope with a possible change of government (2015 UK elections), amongst other things such as the UK’s
position in Europe and low or no growth in the Eurozone. It was certainly a difficult year for component suppliers for many reasons. In 2015, the distribution components market in the UK/Ireland was one per cent less than 2014 with the Electronic Components Supply Network (ECSN) predicting very little growth in 2016. In fact, they forecast little or no growth at all in the next 12 months, which suggests another difficult year could well be on its way.
Chris Haworth, Head of
EU, Farnell element14, thinks that the key for 2016 is differentiation. “In 2015, we have seen many distributors looking at ways to differentiate their offerings and strengthen the basics – focusing on delivering a high quality service. With uncertain market conditions it’s important to invest in the right areas and products that will ultimately help your customers complete designs, get products to market and solve the challenges they’re facing every day.
“Over the past 12 Chris Haworth 14 December 2015/January 2016
months, many distributors have been focusing on competition in new business areas such as production, manufacturing, design and volume as well as accessing new vertical markets. Our acquisitions of AVID and Embest were specifically related to expanding our
Components in Electronics
design and manufacturing capability while the recent AS9120 certification makes it easier for customers in military and aerospace to do business with us.” Charlie Peppiat, CEO of Stadium
Electronics has experienced growth in 2015 due to a number of developments made within the business. “2015 was a year of significant progress for Stadium as we transition to become a leading global design-led technologies company offering
customers complete end-to- end integrated electronic technology solutions, from concept through to delivery. “During the year we made a number of strategic developments to support this which included restructuring the business into two operating divisions; Technology Products (incorporating wireless, interface & displays and power) and integrated Electronic Manufacturing Services (iEMS). We relocated our China operations to a new state of the art manufacturing facility and continued to strengthen our international management and technical teams.” He continued, “Early in the year we successfully opened three Regional Design Centres (RDCs) at carefully selected locations in the UK and Asia to attract the right talent and to be close to key eco- system partners and customers. We see our RDCs as being key to driving innovation and technological developments in product efficiency, user experience, connectivity and miniaturisation across our Technology Products division. Our commitment to R&D will continue into 2016, driven by our engineering thought leaders and the group’s technology board.” “We also continue to progress our strategy of making targeted, complementary acquisitions to strengthen our integrated technology offering. Stadium United Wireless, which we acquired in July 2014, has performed well
this year and the acquisition of Stontronics, a leading manufacturer and distributor of power products, in August 2015 augments the group’s existing power capabilities and presents a much
Charlie Pepiatt
stronger combined proposition to our global OEM customers.” Steve Rawlins, CEO of Anglia Components, thinks that mergers and acquisitions have played a big part of the past year. “Mergers and acquisitions (M&A) especially in the semiconductor sector has been the most visible trend in the market of 2015 and this is likely to continue. Generally M&A benefits the shareholders – there are few if any advantages for customers. Not only does M&A reduce choice directly, but quite often indirectly too, as newly merged organisations try to realise economies of scale by reducing the number of distributors that they deal with to two or three global organisations. This is a naïve view: it is unrealistic to expect distributors
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