Front End | Electronic Components Supply Network
European electronic components market – Q2 ’25 overview
For most electronics companies the final quarter of the financial year is the time when executives start high-level engagement to forecast the performance and financial success of their company in the coming year, but according to Adam Fletcher, chairman of the Electronic Components Supply Network (ecsn), they will be finding it a real struggle this year. “The Trump administration’s imposition of punitive trade tariffs and the prospect of an escalating technology trade war between the US and China is impacting and impeding the global economic growth on which the electronic components markets rely,” Fletcher said. “2026 is going to be a particularly tough year to forecast.”
All organisations must forecast All successful organisations in the global electronic components network collect internal statistics and employ sophisticated systems to record and analyse data from a vast array of internal financial reference points. The data collected is used to measure and review their current and future performance, but they also need to “benchmark” their organisation’s performance in the light of their competitors’ successes (and failures) and the pertaining business trends in order to arrive at an accurate and comprehensive overview of the organisation’s true position in the market. Such is the complexity of the process in electronic components markets that many turn to specialist third-party organisations to crunch the numbers and provide the required market insight.
Financial market analysts Public limited companies (PLCs) have a statutory obligation to publish their key financial figures on a quarterly basis, which financial market analysts use to deliver very detailed insights into the performance of these companies that seek to guide investors to buy, hold or sell shares in a particular organisation. Many also produce business forecasts on particular companies with the aim of generating greater investor support for the client company and thereby increase the value of the shares. Financial market analysts apply a range of well-established and defined financial metrics alongside a great deal of investment expertise to compare and contrast published figures to gauge the likely impact on their client’s share
12 October 2025
price. NVIDIA, a world leader in artificial intelligence (AI) computing and now one of the most valuable organisations in the world, is an excellent current example. NVIDIA’s market capitalisation (and the value of its shares) has increased exponentially over the past few years so it’s no surprise that there’s huge interest in the organisation’s performance. Many financial analysts are engaged in providing an accurate insight into the company’s likely future metrics because even a slight dip in its performance going forward could have a major financial impact on the company and, with it, the wider electronic components market.
Industry market analysts Industry market analysts in the electronics field often specialise in a particular market sector i.e. semiconductors, interconnect, mobile telephony or computers. They investigate the behaviour of companies in the market sector and track the actions that organisations are making to drive change, based on forecast demand and macro- economic conditions. The Semiconductor Industry Association (SIA) is a great example. The SIA tracks the sales revenues of the semiconductor industry on a global basis and publish its analysis each month providing industry with a very useful guide on current and future market trends.
National and local business associations
National, international and local business associations, typified by the UK’s national Confederation of British Industry (CBI) and regional chambers of commerce, collect data from across a wide and diverse range
Components in Electronics
of industries and ‘overlay’ the consolidated figures on to the UK’s gross domestic product (GDP) performance figures. The results obtained enable member companies to compare their performance with the local or national economy and are often used as ammunition with which to lobby governments on the changes needed to stimulate growth.
Industry associations
Industry or trade associations often accept responsibility for the collection of very industry- specific data on behalf of their member organisations. Always mindful of commercial sensitivity, these organisations will aggregate their members’ data before compiling periodic reports, which both enable comparison with the average and interpretation of the key factors affecting their industry, their market or the economies they serve. ecsn member companies for instance invest a great deal of time in determining their organisation’s financial objectives and assessing the potential impact the various results could have on their business plans.
Forecast accuracy and luck I agree with CCmath’s Ger Koole, who says: “A forecaster can never do it completely right: a perfect forecast is purely luck; the ‘noise’ will most of the time prevent the actuals from being exactly equal to the forecasts.” Over, the past twenty years the annual forecasts that ecsn releases at the end of each year have turned out to be accurate on fifteen occasions, so overall we can be considered to have been fairly lucky. However, the association’s forecast for 2025 predicted no growth (0 per cent) over
the previous year but the reality is now looking more like a decline in the range of 8 per cent to 10 per cent, so sadly, ecsn will probably need to put its forecast for 2025 in the ‘inaccurate’ column.
‘Noise’ impacting the 2026 UK / Ireland electronic components market forecast
The US Government is continuing to use trade tariffs as both a ‘stick and carrot’ when trying to resolve what it considers to be unfair competition by third-party countries, actions that have significantly reduced growth in global economic activity and thereby in global GDP. The GDP growth in the UK for 2026 is currently forecast at 1.1 per cent. The technology trade war between the US and China looks likely to escalate in the remaining months of this year and probably beyond. China has responded to the US trade sanctions on the export of semiconductor equipment, software and components by imposing further export licence restrictions on a wide range of ‘rare earth’ materials, where they enjoy a dominant market position in both extraction and refining. Rare earth materials are essential for the production of a wide range of electronic and defence products.
The restrictions that the US is imposing on the imports of high-performance AI semiconductors and software to China are severely impacting sales revenues of US and European organisations beyond their control, and at the same time spurring Chinese local product development. Domestic production across the AI infrastructure in China will inevitably
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