Front End | Electronic Components Supply Network
Likely outcome for the UK electronic components market in 2H’23
The UK electronic components market in 2H’23 is almost certainly going to comply with the famous idiom attributed to Sir Isaac Newton (1643 – 1727) that “what goes up must come down”. At the end of last year ecsn members predicted that electronic components manufacturer lead-times would ‘normalise’ in mid-2023 and that has now largely happened. Current lead-times are more refl ective of reality at a rough average of @10 weeks. Not ex-stock certainly, but not 26 weeks either.
Concluding thoughts
Manufacturers of electronic components have responded to recent customer demand profi les and the need to maintain their market position by ramping up their investment in new manufacturing capacity. This strategy is not without its risks however, as the ‘headline’ market growth statistics that prompt their investment could well be signifi cantly higher than ‘actual’ growth because of the high inventory levels recently put in place by both their authorised distributor partners and their OEM customers. I suspect that UK customers
will start to implement a strategy of both de- committing and de-stocking in 2H’23, which will drive the B2B ratio into negative territory and reduce the high growth rate we saw in the fi rst half of the year. That’s not necessarily a bad thing as the UK market for electronic components needs to be moving towards a more ‘normalised position’ of moderate Bookings and Billings growth. Growth of @5% is probably ‘built-in’ for 2H’23 but fully returning to a ‘normalised position’ will be a delicate balancing act. A furtherance of the collaboration we’ve seen in recent years, both up and down the supply network is needed to ensure a successful outcome for all organisations in our industry.
For information
Adam Fletcher is chairman of the Electronic Components Supply Network (ecsn), a UK business association that was established in 1970 and today offers support to all organisations with an interest in electronics
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technology. He also chairs the International Distribution of Electronics Association (IDEA), a federation of individual country electronic components associations whose objective is to arrive at and share best industry practice.
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Components in Electronics
September 2023 13
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