Front End | Electronic Components Supply Network
It’s horrid elsewhere in Europe too Germany is the largest European market for electronic components but subject to audited data it now looks likely that the country will report a decline in Q1’24 (close to 30 per cent). This will set a trend that I suspect will continue throughout 2024 due to Germany’s heavy dependence on export sales, particularly in China - itself a market that is likely to remain sluggish due primarily to its ongoing trade war with the US and declining automotive sales. France and Italy also posted revenue declines (@ 20 per cent) in Q1’24 but their markets seem likely to normalise in a similar timescale to the UK.
…. and not too good in the USA or Japan
The fully audited data for the US electronic components markets is not yet available but those in the know are confident that the market in North America remained in low single digit negative growth territory in Q1’24. They expect things to improve slightly in Q2’24 whilst remaining negative but are optimistic that the US will return to growth in 2H’24, ahead of European electronic components markets. The Japanese electronic components market has been slowly contracting for the past three
quarters but appears to have stabilised to ‘flat’ in Q1’24, (showing no growth or decline), and improvements are expected in subsequent quarters.
China and Asia
China keeps its economic data very close to its chest, but anecdotal evidence suggests that the market for electronic components in China is continuing to grow but only at low single digit levels. In contrast other Asian markets are performing better and seem to be growing, albeit only at high single digit levels. In percentage terms India is currently enjoying very high growth, but it started from a low base compared to more developed economies.
Concluding thoughts
I’m quietly confident that much of the current ‘inventory indigestion’ will be relieved in 2024 as component manufacturers’ inventory is consumed, albeit at a rate slower than anticipated due to customers reducing their in-house inventory and the slowing in demand due to a generally weak macro-economic environment. However, to mitigate the next, some may say inevitable, demand and supply problem I strongly urge procurement professionals and systems integrators to carefully review their organisation’s in-house
inventory holding, key components lead-time data and purchase order cover, and help mitigate further lead-time problems by joining with ecsn members in actively increasing their involvement in wider industry collaboration and stabilisation, both up and down their supply networks.
For information Adam Fletcher is chairman of the Electronic “
Components Supply Network (ecsn), a business association established in 1970 that today offers support to all organisations with an interest in electronic components throughout their entire lifecycle. He is also chairman of the International Distribution of Electronics Association (IDEA), an association of individual country electronic components associations whose objective is to arrive at and share best industry practice.
www.cieonline.co.uk
Components in Electronics
May 2024 13
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