Industry Insights

“We are starting to see signs of recovery in the market”

Over the last few years, the electronics industry has experienced an unprecedented number of black swan events: from the pandemic to the supply chain being stretched, in addition to political factors that have impacted the way electronics are sourced and purchased.

These events have had a lasting impact on the market. As we look towards the future and assess the forecast rebound of the market, Graham Maggs, VP Marketing EMEA, Mouser Electronics takes a look at how these factors will play out and evolve over the second half of 2024.

The electronics component industry is still feeling the effects of the semiconductor shortage and the decline in the production of semiconductors prior to 2023. This was caused by numerous factors, including the pandemic, and then rising demand which led to OEMs buying up components, which was intensified by global geopolitical unrest and inflationary pressures. The recovery is being facilitated through initiatives like the CHIP Act in the USA and the European Chips Act in the EU, with growth in global semiconductor sales predicted to accelerate in 2025-2026. Even now, we are starting to see signs of recovery in the market. Memory prices and lead times are suggesting this forecast is on track and that by the end of 2024, the industry will start to turn the corner.

We are optimistic that the market will start to grow by the end of this year, with a substantial recovery in 2025. We anticipate the mil/aero and transportation sectors will continue to show strength, with key technologies like 5G, IoT, IIoT, AI, robotics, transportation, and smart tech driving innovation throughout 2024.

Furthermore, the industry can anticipate new investment; the Semiconductor Industry Association predicts that increased private and government investments will lead to greater semiconductor production. This can help prevent future chip shortages and ensure the industry meets the growing needs of sectors like the automotive, data, and communication industries.

Yet, escalating geopolitical unrest and economic instability continuing to occur in several parts of the world are making it difficult to foresee the future completely.

In such conditions, it is important to identify which product categories are increasing in popularity, as well as be strategic with business investment. At Mouser, we are consistently assessing market conditions and buying trends to enable us to predict future demand.

The shortages the industry faced during the COVID-19 period, led to an increase in the volume of counterfeit products available on the black and grey market. The risk of these entering the supply chain is not something new, and whilst the problem was exacerbated during the pandemic, the risks of them being used in designs remain the same. The use of counterfeits has the potential to lead to production shutdowns to product failures – these are all well-documented. Mitigating this risk by partnering with an authorised distributor, such as Mouser, enables procurement professionals to be confident that the parts they source are authentic, facilitating the smooth production of an end device.

Mouser takes every precaution and has stringent product traceability and anti-counterfeit controls in place to ensure our customers receive authorised, authentic components from our 1,200 + manufacturer partners.

Mouser ensures this by being:

  • A coveted AS9100D certified distributor
  • The first distributor to be accredited as fully meeting the stringent requirements of the SAE AS6496 standard
  • A member of ECIA (Electronic Components Industry Association) and ECAS (Electronic Components Application and Supply Chain Branch of CIITA)
  • A member of

So, whilst we are still in the recovery phase, both with the increase in counterfeits and production and supply shortages, the outlook is positive. Supported by government investment and initiatives and by the benefits of working with an authorised distributor such as Mouser, the future is bright!