Front End | Electronic Components Supply Network
markets would experience an overall sales revenue growth in the range (2%)-to-4.9% with a mid-range estimate of 2.8%. Please see graphic “Forecast Billings – Actual and F/C 2022”.
The green, purple and blue lines in the graphic show the forecast range for 2023, whilst the pink line shows the actual performance. I have extended the pink line in red to show the provisional results for Q3’23 and my best estimate of the Q4’23 outcome. It’s apparent that the collective prediction of ecsn members was unfortunately wrong and we hold our hands up! The actual sales revenue growth was very much stronger, close to 12% by Q3’23 and as a result we are likely to end the year with growth in the range 10% to 12%.
Events, dear boy, events Why did ecsn get things so wrong since 2021? To quote former Prime Minister Harold Macmillan, “Events, dear boy [and girl], events”. The COVID-19 pandemic, Russia’s attack on Ukraine, the ongoing trade war between the US and China and now the situation in the Middle East have made this the most turbulent period
in terms of macroeconomic and political disruption that electronic components markets have ever witnessed.
But it’s not all bad news: Improvements in component supply and international logistics have helped electronic components manufacturers and their authorised distributors to make record shipments to OEM customers in 2023, despite the ongoing political and economic turmoil. It’s my opinion however that this period of very strong ‘Billings’ growth will slow to modest single digit growth into 1H’24 while ‘Bookings’ are already declining right across the electronic components supply network, a trend that looks likely to extend into Q4’23 and 1H’24. I anticipate components manufacturer lead-times remaining in the 8-to-10 week range except for a small group of significant outliers, primarily some micro controllers and specialist semiconductor devices. We will not see a return to pre-pandemic “non-existent” lead-times but manufacturer authorised distributors who serve 99% of the UK and Ireland customer base will have much greater inventory availability.
My best advice is that all organisations
right across the electronic components supply network continue to manage their relationships, order books and inventory in order to avoid problems for their upstream and downstream supply network partners. At the time of writing ecsn is compiling its Market Forecast 2024 but only time will tell if we were correct, lucky or just plain wrong. Whatever the outcome ecsn members will be doing their very best to support the needs of both the manufacturers they represent and their mutual customers!
“ 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.
…Promoti ng Positi ve Collaborati on Throughout the Electronic Components Supply Network to Benefi t Members and the Economy…
”
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Components in Electronics
November 2023 13
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