Outlook 2023: Navigating the waters ahead

4 mins read

As global pressures start to ease, so innovation comes to the fore.

After an extraordinary couple of years in the electronics sector dominated by the impact of the pandemic and supply chain challenges caused by pent-up demand, there are signs of calmer waters on the horizon, characterised by a more modest but predictable period of growth.

According to the World Semiconductor Trade Statistics, the global semiconductor market will increase by 13.9 per cent in 2022 and will continue to grow by 4.6 per cent in 2023. While these statistics indicate a slowing in the rate of demand for worldwide semiconductors, they still show steady growth in all key regions of the world as the electronic industry starts to settle into a more manageable state of equilibrium.

The lengthy product lead times that have dogged the electronics sector for the past couple of years are likely to improve. Many customers have tried to alleviate the impact of supply chain disruption by placing orders for semiconductors and other electronic components several months ahead. This robust demand (without ample supply) has contributed to inflationary pressures, with prices rising accordingly. Now, the industry is seeing slight easing, which means lead times and price rises should begin stabilising in some product categories.

A less frantic market in 2023 may also lead to the reduction in the temptation to circumvent product shortages by sourcing components from unauthorised distributors. While it is understandable that some design engineers have been frustrated by long lead times and have been tempted to turn to the grey market, the risks associated with such activity are considerable. The provenance of such parts is often unknown, meaning that authenticity cannot be determined. Counterfeit parts are unlikely to have undergone the same rigorous testing and quality control as those from genuine sources, which can lead to inferior performance. In worst-case scenarios, counterfeit components could fail in the field, putting engineers that use such components at risk of legal action.

More manageable market conditions in 2023 are likely to lessen reliance on inauthentic parts — a trend to be strongly welcomed in the electronic industry. Mouser implements rigorous processes — including meeting industry standards like AS9100D and AS6496 — to prevent counterfeit products from entering its supply chain, so customers can be confident that the components they purchase are genuine.

Smaller, stronger and more connected

Demand for semiconductors and other electronic components is being powered by a confluence of factors associated primarily with the trend towards more intelligent and connected products. This trend has been felt particularly keenly in consumer markets, as devices such as smartphones and tablets have become central to our everyday lives.

But the demand for smarter and more connected products and systems has also translated to business-to-business sectors, where digitalisation and the emergence of the fourth industrial revolution have started to take hold. For example, in manufacturing, the Industrial Internet of Things (IIoT) - characterised by the deployment of interconnected sensors, communication, and advanced data analytics - has transformed the efficiency of production processes on the shop floor.

IIoT depends on highly advanced integrated circuits that deliver the intelligence to provide sensing, measurement and monitoring, power management, control and communication.

Mouser stocks the widest selection of the newest products and technologies from over 1,200 top brands for each of these requirements, allowing IIoT systems to become smaller, faster, more robust and advanced with greater capabilities, functions and features.

Top tips for design engineers

So those are some of the critical technologies and trends that are likely to impact 2023. But what can engineers do daily to ensure they are best positioned to make the most of the opportunities ahead? Here are Mouser’s top three tips to help bring your design ideas to life in what is still likely to be a fast-paced and competitive business environment.

  1. Think about component availability from the start

While lead times are expected to improve in 2023, designing for availability (DFA) from the very start is a sound approach that can ward off any looming problems and reduce the cost of redesigning with alternative components. Through this practical approach, it is often possible to identify several alternative solutions from various suppliers that match your requirements. Experts from a trusted distributor like Mouser are on hand to help identify and source alternatives, and our experience shows it helps to categorise components in terms of priority type from the outset:

Category 1: Converters, microcontrollers and processors are vital and should be selected and ordered at the earliest stage of the design cycle (even before using any design software).

Category 2: Other components such as LEDs, connectors and amplifiers should be selected and specified in the bill of materials (BOM) because they are not as plentiful but have pin-compatible alternatives.

Category 3: Passives like resistors and capacitors, which have multiple alternatives, can be finalised and purchased after completing your design.

  1. Seek out authorised electronics distributors

While shortages of components may have been a new experience for some, distributors have seen this happen many times. We are well prepared to assist customers in selecting alternative parts. Authorised distributors like Mouser communicate regularly with their manufacturer partners to better understand their challenges and gain valuable insight into current and future availability. Building relationships with distribution partners gives customers a better overview of what is happening in the industry.

  1. Utilise tools to assist your DFA Implementation

Many online tools help simplify DFA tasks, including Mouser’s intelligent BOM tool, FORTE, which offers a free and convenient method of managing the complete BOM for a product’s lifecycle. FORTE provides a host of valuable and time-saving features that help minimise risk, including:

  • Flexible BOM import process from almost any spreadsheet format
  • Part match confidence level to provide confidence around correct part selection
  • Design risk indication to help eliminate the chance of stock and obsolescence issues
  • Ability to add, amend, and delete parts without leaving the tool
  • Checking price breaks for multiple quantities without committing to changing the BOM
  • Ability to export, share, and print BOMs.

Leading distributors like Mouser also provide comprehensive design information for each component, including PCB footprints, symbols, and 3D CAD models. These vital product files contain all the required information covering both the circuit and mechanical aspects of design, and ultimately smoothing the product selection and design process.

The power of partnership

So that’s the top-level outlook for 2023. At Mouser, we think that the industry momentum from this year will be carried over to the next and that business will remain good across all key verticals — with consumer perhaps being the most challenged. More manageable growth may lessen the impact of some of the supply chain problems that the industry has seen in recent years, giving design engineers time to think creatively and innovatively. With many applications for electronics, the year 2023 holds plenty of opportunities in the electronics sector — and Mouser will continue to stand in partnership with our customers as they develop the exciting technologies of tomorrow.

Author details: Mark Burr-Lonnon, Senior Vice President of Global Service & EMEA and APAC Business, Mouser Electronics