Outlook 2021: A return to better times

4 mins read

After a turbulent and disruptive year there are reasons for optimism in the electronics sector for 2021.

There is no doubt that 2020 will be remembered for all the wrong reasons. The COVID-19 pandemic has wreaked havoc across multiple sectors, and for a lot of companies, the sole focus has been on business survival.

That said, there are some positives to take from the way that many organisations have pivoted in response to life in the new normal. As governments around the world sought to address the global shortage of critical medical supplies such as ventilators and PPE, many manufacturers diverted resources in support of national efforts to design and build much-needed equipment, often overnight.

Indeed, one of Mouser’s customers in Malaysia which had historically focussed on making parts for hand-tools re-ordered its business in the shortest timeframe to supply components for the healthcare market. It was this kind of responsiveness and agility, replicated many times around the globe, that has helped companies weather the storm.

Showing admirable resolve

In the electronics industry, I have been impressed by the strong sense of resolve exhibited since the pandemic began. Electronics, as a sector, has always looked to do something new and different. And this innovative flair has really come to the fore in recent months, as design engineers have used any hiatus in business activity to create smarter products that answer specific needs. That is why, despite being a period of unprecedented turbulence, Mouser has seen consistent business activity throughout the year-to-date, as engineers have continued to source components and start new projects. Yes, in many cases production lines might have ground to a halt, but innovation has not stopped, and a lot of design engineers have been extremely busy in the background, adding value and bringing new ideas to life.

There are other positives to take. National lockdowns have resulted in extended periods of working from home. While there is no doubt that many of us miss the day-to-day interaction provided by the office, remote working has delivered some notable benefits. Software packages such as Zoom have become second-nature to most, and it is often faster and more productive to set up meetings online than face-to-face. The sudden popularity of video conferencing has made it easier for extended teams to come together – and this has to my mind often resulted in more in-depth discussions with our customers.

Many of us were possibly sceptical of widespread remote working when the pandemic began. But here at Mouser, we have coped with this new set-up, and I think the positives of this flexible approach far outweigh the negatives. Also, if this trend is here to stay, there will be plenty of opportunities in the electronics sector, as new collaborative communication tools are developed.

What’s next?

Looking back on 2020, it is fair to say that the electronics industry has made the most of what has been an extremely challenging period. Mouser, as an online business with a large inventory, was well equipped to cope with the sudden change. But the challenge now – as for every organisation – is to remain flexible and agile to cope with any further disruptions that might come along. There is also a need to anticipate the business opportunities that will emerge as the world starts to get back on its feet.

Considering the turbulence of the last few years, predictions are difficult and predominantly short term, but with that in mind, I’ll share five of my predictions for the year ahead, all of which will have an impact on our sector:

5G makes a big impact: The rollout of 5G has taken longer than many of us might have expected with the epidemic arriving at a critical time in the deployment phase. However, I hope to see rapid progress with 5G infrastructure built in 2021, with an acceleration in the construction of base stations and other equipment. That activity will lead to a surge in demand for relevant electronic systems and components. The challenge for the sector is to be ready for that anticipated uptick in business to avoid bottlenecks caused by shortages of parts – something that Mouser is well prepared for with high Inventory levels of more than $845 million of stock.

Automotive gets back in gear: The carmakers have had a tough year, with new vehicles sales in free-fall and production lines grinding to a halt. But there are already signs that the industry is bouncing back, as pent up demand starts to filter through – and I believe that momentum will be sustained in 2021. Longer-term, prospects are bright as the automotive sector continues to embrace electrification and autonomous vehicles. What I find fascinating is how the industry will be structured over the longer-term. Will the OEMs like GM and Ford and the tier 1s like Bosch remain as the big players? Or will the tech companies emerge as new rivals? Whatever happens, there will be plenty of opportunities for electronics companies.

Healthcare goes remote: The epidemic is likely to have a profound effect on specific sectors, and healthcare is one area where deep-rooted, long-lasting change will take place. We have already seen a shift to more online services, as patients access their GPs through video links. I think this will continue across 2021, as the healthcare industry embraces technology such as sensor-based remote monitoring of patients. Again, much of this technology will be delivered by electronic suppliers, whose innovation will help underpin transformational change.

Content will be king: As an online distributor, web analytics are critical to our business, and our visitor statistics show some interesting trends over the past few months. With more engineers working from home, we have seen a sharp increase in the consumption of online technical resources such as articles, block diagrams and case studies. Mouser’s Applications & Technologies site offers tutorials, white papers and technical guidance to help visitors with their design projects. With less time spent commuting, engineers have been keen to come to the website to learn and keep up to date. So, I think relevant, well-written technical content will be increasingly important in a changing world, as engineers seek out information for their professional development.

2021 will exceed expectations

And now to an overall prediction of business activity for the year ahead.

Firstly, though, it is worth noting that 2020 – for all its unpredictability – has resulted in consistent trading across the year. Here at Mouser, our sales globally are up around 6 per cent to date, and there are high hopes for the final quarter. That gives us confidence in the future, and I think the electronics industry will enter 2021 on a strong upwards trajectory which will continue across the year. The focus for us as a company is to carry on doing what we do best: that is, supplying engineers with the latest parts first, and helping our customers to innovate and create without delay. Around 20 per cent of our huge inventory is NPIs (new product introductions), and that commitment to supplying the latest technology will remain a focus throughout the year.

Author details: Mark Burr-Lonnon, Senior VP EMEA, Asia and Global Service, Mouser Electronics