According to the Consumer Technology Association (CTA) – the leading voice in consumer electronics and technology forecasting – consumer technology retail revenue alone will reach a staggering bracket of $400 billion US dollars. So how does a fairly new industry compared to staple industries like agriculture or healthcare, keep up with the big red ball racing down the mountain that is technology?
Passive components, active components and printed circuit boards (PCBs) are all in high demand to make our consumer and industrial technologies run and it will be every supply chain’s huge feat and duty to fuel the next consumer craze, industry standard, and innovation in technology. The global market for electronic components is predicted to grow at a compound annual growth rate (CAGR) of about 5.6% from 2019 to 2024 and will reach $499,600 million US dollars in 2024, from $360,700 million US dollars in 2019.
Market sectors like military, commercial aerospace, industrial, automotive, mobile devices, it and datacom, mobile networks, and broadband are all sectors that rely highly on electronic components and thus on the manufacturing of those components. So, who is doing all the hard manufacturing labor?
The top 3 electronic component manufacturers supplying the world of technology are Analog Devices, Inc., Texas Instruments, and Murata. These company giants and others like them face challenges of meeting cost profiles, product delivery schedules, updating component compliance information across various country legislations/red tape, and finally the most predominant obstacle, meeting global demand. The shortage of supply to demand has caused the price of electronic components to quintuple. Suppliers are implementing limitations on purchase quantity to combat the endless hunger of current buyers but this in turn has a negative impact on ambitious companies because it limits an otherwise endless growth possibility. In order to adapt, manufacturing companies practice careful production planning and ultimately look to secure secondary sources as a means to meet high demand.
As schedule times and supply are carefully monitored, there looms another evolving obstacle that will always be a rock in the shoe of electronic component manufacturing, the RoHS or Restriction of Hazardous Substances Directive. In any new industry it takes time for safety laws to catch up to new trends; the effects of cigarettes not being known in early years of their popularity. Like these examples, certain hazardous substances in electrical and electronic equipment and components are just recently being banned and new legislation being passed to ensure the safety of the consumer and the environment.
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