An electronic components is a physical entity in an electronic device that is used to affect the electronic field. Electronic components are categorized into two types i.e. active components and passive components. Active electronic components are used to produce energy in the form of voltage, whereas passive electronic components are used in storing energy in the form of current. Passive components cannot amplify or energize the energy of the signal associated with them, they can only attenuate it, while active components can energize or amplify the signal.
The increasing use of the internet of things and automotive technologies in electronic devices is expected to drive the overall growth of the electronic components market in recent years. In addition to this, an increase in the use of the internet of things in factories, homes, telecommunication, and domestic and industrial electronics are some of the factors that are driving the demand for electronic components. Further, the increasing demand for electronic components by Original Equipment Manufacturers (OEMs) to fit the smaller components to their circuit board assemblies is creating a significant opportunity for the electronic components market during the forecast period.
In addition, the increasing penetration of smartphones & other wearable devices and industrial automation is expected to propel the growth of the electronic components market during the forecast period. For instance, according to secondary sources, in 2021, the number of smartphones subscription across the globe surpasses 6.0 Bn and is expected to grow in the coming years. The countries like China, India, and the U.S. has the highest number of smartphones users.
China is one of the prominent electronics exporters and the U.S. is the major importer from China. However, in 2018, the U.S. levied around 25% import tariffs on Chinese electronics. Therefore, the trade conflicts between the two economies are likely to hinder market growth to some extent. Furthermore, high labor costs in the manufacturing sector across developed countries, such as the U.S., the U.K., and Germany, are anticipated to limit the market growth.
COVID 19 impact
The COVID-19 pandemic has negatively impacted various industries such as automotive, oil & gas, retail, and others. This is attributed to the strict lockdown imposed by the government to limit the spread of the COVID-19 pandemic. The electronic components market is completely dependent on the end-use industries such as automotive, healthcare, and others. The spending patterns of end-use industries have come down drastically, resulted in decreased demand from consumer electronics due to the weak economic conditions.
The COVID-19 pandemic has had a substantial impact on the passive and interconnecting electronic components manufacturing industries across the globe. Countries, such as China, Germany, the U.S., Japan, and South Korea, had a significant number of COVID-19 cases compelling the governments to impose restrictions, such as lockdown in highly-affected cities, sealing international borders for trades, and allowing companies to provide employees work-from-home facilities. Fall in production and exports of electronics components, due to the temporary shutdown of production facilities and international borders, significantly affected the overall market growth in Q1 and Q2 of 2020.
However, due to the reopening of economies, sign of recovery are beginning to appear in the electronics industry owing to the increasing demand for smartphones and other electronic appliances. Thus, the electronic components market gaining traction in the coming years.
Based on the type, the electronic components market has been segmented into passive, active, electro-mechanic. The active segment in the electronic components market accounted for the largest market share and is expected to remain constant during the forecast period. However, the passive segment in the electronic components market is growing at a constant rate during the forecast period due to increasing digitalization coupled with increased connectivity and mobility demand.
Based on application, the global electronic components market has been segmented into automotive, communication, computing application, industrial, others. The automotive segment in electronic components market held the largest market share in 2020 and is expected to continue this pattern during the forecast period. The growth in this segment is attributed to the increasing on-roads traffics, increasing passenger vehicles and high adoption of electric vehicles across the globe. However, the electronics industry segment in electronic components market is anticipated to grow at a significant rate during the forecast period due to the high penetration of smartphones across the globe.
Global Passive Electronic Components Market
The Global Passive Electronic Components Market was valued at USD 31. 54 billion in 2020 and is expected to reach USD 40. 81 billion by 2026 and grow at a CAGR of 4. 5% over the forecast period (2021 – 2026).
The increasing adoption of digitalization coupled with increased connectivity and mobility demand is further increasing the complexity of electronics. This is accelerating the demand for passive components in electronics.
Consumer electronics holds the highest consumption of inductors. Inductors are used for power supply in various complex circuits, to manage the current, and as a filter to cut off undesirable frequencies. Consumer goods, such as television sets, wearable devices, and computing devices, keep a steady demand for inductors. However, the newer trend for connected and smart devices is going to see increased circuitry, leading to an increased demand for inductors in the near future.
Multi-layered inductors have gained popularity in the market, allowing manufacturers to design different shapes and geometries of inductors based on the requirements from the OEMs of electronic devices. With the consumer electronics industry being driven by the continued innovation in product design, the market is expected to experience more collaborative developments during the forecast period.
Furthermore, the PCB miniaturization, advancements in semiconductor and circuit architectures paved the way for the demand for capacitors in smartphones to increase. On-board capacitor deployments in smartphones are typically in the form of multilayer ceramic capacitors class I or class II technology. With 5G adoption, more capacitors will be demanded to suffice the higher efficiency needs. However, since the circuitry for cameras, motors, and speakers requires higher voltage and frequency, multiple inductors are used within a single mobile phone. Accessories, like adapters and headphones, also have inductors in them, hence, making the smartphone segment the biggest consumer of inductors.
Apart from consumer electronics, the automotive industry witnessed an augmented demand for electronic components, owing to the expected growth in the need for electric vehicles, connected cars, and autonomous driving cars over the coming years. Furthermore, the vendors in the market are focusing on offering solutions specific to the industry. For instance, in March 2020, KEMET introduced metal composite power inductors for automotive applications. Such developments are expected to increase over the coming years, driving the demand for passive electronics.
However, passive electronic component manufacturers have been witnessing increasing costs in feedstock metals for the last two years. The higher metal prices are significantly impacting the mass-produced electronic components consumed in the consumer electronics and automotive sectors. The variable costs to produce passive electronic components is around 40-50%, and the fixed cost is around 15-20%.
Active component market
The global active electronic components market size was valued at USD 273.7 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 9.2% from 2021 to 2028. The rapidly growing demand for consumer electronics devices, such as smartphones and laptops, is the major factor driving the market.
Active electronic components are the integral components of telecom equipment and other networking devices that need an energy source to perform an assigned task. The increasing demand for high bandwidth with low latency among consumers has enabled telecom operators, especially in emerging economies like India, to deploy next-generation 5G network infrastructure. This, in turn, will augment the demand for new IT and telecom equipment, thereby increasing product adoption.
Growing automation in the automotive sector has increased the demand for various electronic devices, such as driver assistance systems, DC to AC converters, controllers, and power integrated devices, telematics, and Global Positioning Systems (GPS) among others. These devices are widely used in Electric Vehicles (EVs) and autonomous vehicles. Hence, the growing demand for electric cars is estimated to spur product adoption over the forecast period. With the advent of connected technologies, the manufacturing industry is rapidly transforming.
These connected devices help manufacturing facilities to increase overall productivity and operational efficiency by delivering ease of operability and reducing the overall downtime. Moreover, with the evolution of industry 4.0, various manufacturing companies are embracing digitalization to streamline the operational processes through remote monitoring. Hence, the rising deployment of connected devices across manufacturing facilities is expected to drive the market over the coming years.
Active electronic components have always been integral to defense applications for intelligence gathering, navigation, and communication establishment. Increased defense spending in key countries including the U.S., India, and China will also support the market growth. For Instance, the overall defense spending proposed by the U.S. federal government was around USD 686 billion in 2019.
Product Type Insights
In 2020, the semiconductor devices segment held the highest revenue share of over 62% and is estimated to expand further at the fastest CAGR from 2021 to 2028. The segment growth is attributed to the robust adoption of semiconductor devices across several applications including household appliances, mobile phones, Personal Computers (PCs), and network equipment among others. Also, the prevailing trend of miniaturization and developing energy-efficient systems is having a positive impact on the demand for semiconductor devices and related components.
Over the past few years, smartphones have witnessed a massive rise in demand, especially across emerging economies. Also, the demand for 5G chipsets is progressively increasing in the developed economies with the introduction of 5G-enabled smartphones and budding demand for car automation systems and telecom equipment. Therefore, with the increasing production of 5G chipsets, it is presumed that the IC segment may register strong growth during the forecast period. Moreover, the growing investments by market players, such as Intel Corporation and Infineon Technologies AG, in the development of high-processing microchips or microprocessors are estimated to surge the product demand in the IC segment.
The consumer electronics segment led the global market in 2020 accounting for the highest revenue share of over 33%. The segment is expected to expand further at the fastest CAGR of more than 10% over the forecast period. The growth is primarily attributed to the increasing demand for semiconductor devices for various consumer devices, such as mobile phones, digital cameras, Set-Top Boxes (STB), wearable devices, gaming devices, and others. Furthermore, the demand for networking devices, such as routers, modems, gateways, and repeaters, is increasing, especially in office automation and residential application segments. Thus, with the growing demand for network devices and other IT hardware, the adoption of active electronics components will increase over the forecast period.
Based on region, the global electronic components market is categorized into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa. The Asia Pacific is expected to dominate the electronic components market during the forecast period. The growth in the region is attributed to the increasing penetration of smartphones as well as the increasing adoption of electric vehicles. For instance, according to the report published by Global System for Mobile Communication (GSMA), in 2020, it is estimated around 2.8 Bn unique mobile subscribers in 2019 and is forecasted to be 3.0 Bn users by 2025 with a CAGR of 1.5%. Moreover, the increasing adoption of IoT in various industries is anticipated to flourish the electronic components market growth in the region. For instance, according to the same source as above, around 5.2 Bn connection of IoT in 2019 and is expected to reach 11.5 Bn by 2025. Thus, proliferating the growth of the electronic components market in the region.
In 2020, for active components, Asia Pacific held the highest revenue share of over 57% and is estimated to exhibit the fastest CAGR from 2021 to 2028. The market growth in APAC is credited to the presence of a huge consumer electronics sector in the region. It is house to leading consumer electronics manufacturers, such as Samsung Electronics Co., Ltd., BBK electronics (Includes brands such as Vivo, Oppo, Realme), and Xiaomi Corp. Moreover, the demand for several industrial automated systems, including Programmable Logic Controllers (PLCs) and Supervisory Control and Data Acquisition (SCADA) that are designed with electronics systems, is significantly increasing in emerging countries, such as India, China, and South Africa. This, in turn, will drive the product demand in the region.
North America is estimated to be the second-largest regional market over the coming years. With the booming trend for connected cars in the U.S., key telecom giants, such as Verizon Inc. and AT&T Inc., are investing huge amounts for the deployment of the 5G network infrastructure. These next-generation 5G mobile networks are anticipated to provide seamless connectivity to vehicles with infrastructures across the country. In addition, the U.S. government is investing heavily in the development of smart cities across the country. Thus, the deployment of the 5G network infrastructure is anticipated to increase the number of new installations of telecom equipment and other networking devices, thereby driving the market growth in the country.
Key Companies & Market Share Insights
Key players are highly focused on launching new products to gain a significant market share and enhance their overall profitability. For instance, in September 2019, NXP Semiconductors N.V. introduced a secure fine-ranging chipset, ‘SR100T’. This chipset is mainly designed for next-generation Ultra-Wide Band (UWB)-enabled mobile devices to provide highly accurate positioning performance. However, some players are focusing on mergers and acquisitions to strengthen their overall market presence. For instance, in June 2019, Infineon Technologies AG acquired Cypress Semiconductor Corp. to strengthen its product offering and market position.
Some of the prominent players in the global active electronic components market include: Infineon Technologies AG, NXP Semiconductors NV, Texas Instruments, Inc., Toshiba Corp., Intel Corp., Maxim Integrated, Broadcom, Inc., Qualcomm, Inc., Analog Devices, Inc., Advanced Micro Devices, Microchip Technology, Inc., and Monolithic Power Systems, Inc.
- In May 2021, TDK Corporation introduced a new range of EPCOS power capacitors for DC link applications. These brand new capacitors are accessible for rated voltages of 700 V DC to 2000 V DC and cover a capacitance range of 20 µF to 270 µF.
- In January 2021, Panasonic announced the launch of the EEH-ZK(U) Series Conductive Polymer Hybrid Aluminum SMD Electrolytic Capacitors, which are available together with the benefits of electrolytic capacitors with solid polymer capacitors. Further, it offers high-temperature tolerance and small case sizes.
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