Outlook 2024: A fast evolving electronics market

5 mins read

Keeping pace with the latest trends in the evolving global electronics market.

Despite the challenging global economic environment, the electronics industry is in very good health. With growth in most electronic sectors comfortably outpacing nearly all global economies, for those in the electronics industry, there is reason for optimism. So perhaps the hardest challenge within the electronics component industry is keeping pace with the rate of change.

Whether this is the rapid evolution of existing solutions, such as cellular networks and electric vehicles (EVs), or new emerging technologies like artificial intelligence (AI) and smart agriculture, understanding what the latest trends are, and their importance, as well as the driving factors behind them is key to maintaining success.

Emerging Technologies

AI is a development that is seeing significant expansion. For AI at the edge, we are seeing highly practical real-world applications, such as low-power image recognition and intelligent decision making without a reliance on internet connectivity. Additionally, a greater number of companies are applying machine learning techniques and AI to data from industrial sensors. By continually analysing outputs from micro electro-mechanical system (MEMS) sensors, such as accelerometers, it is possible to identify early abnormalities that might have been missed. With machinery such as electric motors, this can assist maintenance teams in detecting failing bearings and couplings before they escalate, saving time and money.

With AI, the core technologies have been under development for decades, but it is only just becoming available and, therefore, viable for many designs. Now real-world applications are here and having a notable impact, we are seeing a step change and market value is projected to reach $165 billion by the end of 2023.

For trends such as AI, the emerging nature of the technology and its ability to solve many persisting problems is fuelling growth. AI is allowing businesses to increase intelligent decision-making and reduce manual labour.

Smart agriculture is another emerging sector that is quickly advancing, with more sophisticated components and innovative approaches constantly appearing. Food and water are arguably our most important global resources, so any industry looking to revolutionise the way we manage these is always going to see growth. In terms of market expansion, many are expecting to see a sizable compound annual growth rate (CAGR) of up to 13.4% for the next seven years.

Smart agriculture is helping to meet global challenges such as the reduction in arable land and increased demand for food, as well as allowing farmers and ranchers to manage sudden weather changes more easily.

Sector Growth

The electronic component industry’s continued ability to innovate and improve with new technologies also fuels a consistent and uninterrupted growth in numerous different fields. There are substantial areas for advancement, with innovations in battery, communication and functionality all delivering noticeable benefits to the end-users and driving an increase in sales.

Many of the driving factors come down to improvements in performance and changes in hardware that enable new implementations. For example, 5G is very much a performance-based proposition, delivering a considerable jump over existing technology and mitigating many of the existing weaknesses. Alternatively, growth in many consumer electronic solutions is often coming from a reduction in costs and innovative implementations.

While there has been a longstanding public interest in technology such as wearables and smart appliances, for many, the high cost of ownership has been a deterrent for adoption. Reduced costs for intelligent consumer electronics, combined with greater functionality, is driving sales. Between 2023 to 2033, some experts project the wearable market’s CAGR to be as high as 14.6% despite the challenging economy.

While the rise of EVs has been stable, it is gaining momentum with improved electronics providing extended ranges and expedited charging. The challenges associated with ownership, including range and charging, have been a significant barrier for many. But as hardware has advanced, a considerable number of these obstacles have been reduced or eliminated, resulting in a shift in purchasing behaviours.

For IoT and Industrial IoT (IIoT), the widespread demand for intelligent perception and decision making is boosting growth, with hardware solutions that are smaller, smarter, and more cost-effective allowing for the spread of applications to increase. For consumers, removing monotonous tasks and simplifying the way they interact with technology are boosting IoT demand. Within industrial settings, IIoT popularity is coming from its ability to increase efficiency, reduce labour, and create powerful insight for diagnostics and data monitoring.

Product demand

An increase in the IoT and IIoT markets has resulted in a strong demand for next-generation communication modules. The latest standards, whether it is BLE, Wi-Fi 6E, Matter, or 5G, resolve a multitude of existing issues and offer an improvement in performance, making them an attractive proposition for many designers.

Hardware that enables AI and Edge AI solutions continues to increase in popularity. Whether we are talking about components being used in final products or development solutions, like the NVIDIA Jetson AGX Orin 32GB Developer Kit from Seeed Studio, engineers are very aware of how AI could impact their industry and designs, so it is an area most are keen to explore. The sustained escalation in intelligence across a variety of electronic applications is driving a requirement for enhanced perception. Image sensors, accelerometers, gyroscopes, radar, and many other sensor types are currently enjoying strong sales as they provide essential information to systems like robotics and AI-backed automation, enabling them to operate safely and accurately.

For many engineers, hardware-based, component level security technologies are becoming more important. The impetus behind this stems from companies becoming more aware of the high-profile damage that can be caused by security breaches and therefore actively looking for ways to rectify any possible vulnerabilities. New standards like IoT Secure are helping to further awareness.

There is also a strong demand for high-performance power components that facilitate advances in EV charging infrastructure and solar inverter performance. Sustainable and smart agricultural enabling technologies are also on the rise.

Meeting Demands

At Mouser, we have been continually analysing the buying patterns to see which product areas are increasing in popularity and to look for how we can meet demand. Our teams are then communicating with both our existing manufacturers, as well as bringing in new ones to help expand our range. We understand the importance of reliable inventory, and we currently have more than $2 billion of inventory available to ship. Additionally, we have broadened our line card by adding over 280 new manufacturers since early 2020.

Investment is also a key part of our business and at our distribution centre in Mansfield, Texas, we are undertaking our largest ever expansion. The state-of-the-art facility, boasting a foundation of 413,000 square feet and standing three stories high, will provide more than one million square feet of added storage and shipping capacity, and is due for completion in 2024. This exciting development will have a significant effect on all areas of our distribution capabilities, allowing us to continue to expand and help our customers to keep pace with the ever-evolving world of electronics.

Despite the challenges of the global economy, the electronics industry is still growing and expected to maintain its growth in the short term. A greater number of products across industry and consumer sectors are now reliant on innovative and often evolving technologies to deliver higher speeds, greater efficiency, and broader functionality.

For us at Mouser, we keep up with fast-moving technology trends within the industry, so as new innovative products emerge, we work to quickly get these stocked and available to order from us, helping our customers maintain continued success.

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