DISTRIBUTION
The changing face of distribution for passives
Electronic component distributors who held their nerve and planned for the future in the face of supply chain turmoil are set to benefit as business returns to normal.
A
fter a turbulent period resulting from the impact of Covid on global supply chains, the market for passive electronic components is experiencing a welcome return to relative stability. The situation in 2021 and 2022, when continuing demand from across industry was thwarted by stock shortages, looks to be in the past. A supply surplus has seen distributors’ shelves replenished and lead times for orders back to pre-pandemic levels of between 10 and 16 weeks.
As ever with the electronics sector, some short-term uncertainty remains, but looking ahead the prospects are positive. Mordor Intelligence’s latest report on the current state of the market for passive components puts its value at $45.53 billion, a figure that it predicts will grow at a rate of more than 6% to reach just over $62 billion by 2029.
The swing from a situation where demand 22
massively outstripped supply to one where stock is readily available is typical of the balancing act that distributors are used to negotiating. The need to be prepared for fluctuating market conditions is not a new issue, even if the events of recent years have brought it into sharper focus.
In fact, smart distributors have used their experience in recent years to ensure they are better positioned to plan and stock everything they need to satisfy customer demand. Suppliers have been doing the same. As Simon Leuz, Team Lead Distribution EMEA at Wurth Elektronik explains “Customers and service providers still have substantial stock in their warehouses. Nevertheless, Würth Elektronik has been investing in its supply chain and stock to enable growth. A strong supply chain, good availability and great partnerships will be significant to service customers when
JUNE 2024 | ELECTRONICS FOR ENGINEERS
the market picks up again. We’re seeing this as a challenge as well as an opportunity. We expect the second half of 2024 to be brighter and better.”
Markets are warming up While their role may not grab the same headlines as cutting-edge chips that incorporate artificial intelligence capability, passives nevertheless underpin virtually every new technology that is experiencing strong growth. That ranges for Internet of Things uses in industry through robotics and automation to 5G communications and electric vehicles. One advantage the market for passives enjoys is that it is consistent and relatively predictable, growing steadily but with no obvious surge in demand for a particular product type or from a specific region. Continued enthusiasm across a wide range
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