Summary of our market study

Since 2020, the market for electronic components has faced significant fluctuations due to the COVID-19 pandemic, with the global market growing by 6.2% in 2021 after a modest 3.3% growth in 2020. The Asia-Pacific region, particularly China, remains the dominant production force, accounting for more than 70% of global electronics exports. The Italian market, despite experiencing a decline in 2020 with a 10% revenue drop in about 65% of companies, saw a robust recovery in 2021 with an aggregate turnover of electronic components exceeding 5.6 billion euros, marking a 15.9% increase.

The pandemic-induced work-from-home shift spurred demand for hardware, contributing to a global shortage of semiconductors that severely impacted the automotive industry and other sectors relying on microchips. Key growth drivers include innovative areas such as electric vehicles, IoT, 5G infrastructure, and the medical sector. For instance, the European electric car market experienced a CAGR of 47.4%, and Italy's IoT market was valued at €7 billion in 2021, up 20% from 2020. Despite production constraints, electronic component manufacturers are seeking innovative and sustainable solutions to meet increasing demand and environmental challenges.

Trends in the Electronics Components Market in a Nutshell

The electronics components market in Italy and across the globe has been experiencing significant trends that are shaping its demand and supply. Within Italy, the industry contributes to 3.4 percent of the national GDP, highlighting its importance in the country's economy. After a challenging period due to the pandemic in 2020, the industry is on an uptick with a projection of substantial growth in the coming years. A remarkable increase in revenue of between 15 and 16 percent has marked a period of recovery for the Italian electronic components sector. This indicates a resurgence in various industries that had been heavily affected by the pandemic. A prime example is the automotive industry, particularly the electric vehicles segment that has seen exponential growth. Forecasts show that this sector could account for nearly 38 percent of Italy's total vehicle production, a significant leap from just 0.1 percent. The medical, industrial, and telecommunications fields are other key sectors that have contributed to the increased demand for electronic components. The medical sector, for instance, has experienced a surge in demand specifically for sensors and microcontrollers due to the health crisis. The growth in telecommunication is propelled by advancements in 5G technology, and the industrial sector is benefiting from an increasing rise in automation and smart technology.

The global market for electronic components is also experiencing a considerable boost. A growth rate of over 6 percent was reported in the world market in 2021, reflecting not only the recovery from pandemic lows but also the acceleration in demand for active components due to the rising utilization of cloud services and telecommuting. Innovation is a notable trend within this market as the demand for microchips and other components skyrockets. Sustainability is also becoming a critical consideration, given the industry's profound environmental impact in terms of energy usage and waste production. The move towards greener technologies and practices is expected to become even more prevalent in the years to come. The Italian electronic components market, which commands a significant position within Europe, being only behind giants like Germany and France, indicates a robust and growing landscape. Although there has been a reduction in the number of active companies over the years, with a decrease of about 20 percent, the sector still employs tens of thousands of people and remains fragmented with a blend of small, medium, and large enterprises. The pricing of electronic components is subject to wide fluctuations due to factors like innovation, supply constraints, and changing raw material costs.

Key Players Shaping the Electronic Components Market Landscape

  • Taiwan Semiconductor Manufacturing Company (TSMC) As the world's preeminent leader in semiconductor manufacturing, TSMC sets the bar high with its extensive portfolio and cutting-edge technology. With a significant portion of the global production share, this Taiwanese giant produces over half of the world's semiconductors. Pioneers in advanced integrated circuit manufacturing, they cater to the burgeoning demands of global tech behemoths, propelling crucial sectors forward, particularly in the realms of high-performance computing and mobile devices.
  • Samsung Electronics Samsung Electronics stands as a South Korean colossus that has fortified its position as a key player in electronic component manufacturing. Besides being a consumer electronics powerhouse, Samsung shines in the semiconductor domain, primarily through its production of memory chips and its burgeoning presence in system semiconductors. Their comprehensive expertise across various electronic segments makes them a critical supplier to a multitude of industries, including automotive and mobile technology.
  • United Microelectronics Corporation (UMC) UMC might not be as massive as its Taiwanese counterpart TSMC, but it is another indispensable entity originating from the semiconductor stronghold of Taiwan. Specializing as a contract chip manufacturer, UMC has a notable share in the global semiconductor production, making substantive contributions particularly in areas requiring specific production capabilities.
  • Semiconductor Manufacturing International Corporation (SMIC) As China's semiconductor frontrunner, SMIC operates at the vanguard of the nation's ambitious plans to secure a stronger foothold in the global electronic components market. Their expertise in semiconductor production, ranging from design and prototyping to large-scale manufacturing, offers a pivotal foundation for China's growing electronic industry.
  • LG Electronics Although LG Electronics is widely recognized for its consumer electronics, it also has an influential presence in the electronic components sector. LG supplies an assorted range of electronic modules and components, including display and battery technologies, that are critical for various consumer and industrial products.
  • MEMC Electronic Materials MEMC, with its specialization in silicon wafer manufacturing, feeds into the crucial early stages of the electronic component supply chain. Their high-grade silicon wafers are a fundamental element for semiconductor devices, and by supplying these to various manufacturers, MEMC plays a pivotal role in the global electronics ecosystem.
  • LFoundry is an Italian beacon in the semiconductor landscape, offering specialty foundry services that cater to the analog, mixed-signal, and specialized markets.
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Summary and extracts

1 Market Overview

1.1 Definition and presentation

The market for electronic components is vast and includes various devices that by definition are intended to be assembled together with others to perform numerous electronic functions.

it is possible to divide this type of components into:

-Passive

-Active

-Electromechanical

Globally, the market for electronic components is expected to grow.

The market value is projected to reach $509.06 billion by 2025, growing at a CAGR of 8 percent

In Italy, the electronic components industry experienced significant growth between 2018 and 2019 while there was a slight decline in sales in 2020 due to the pandemic. It is estimated that about 65 percent of companies had a decline of about 10 percent in revenue. The application sectors that had the most satisfactory performances last year were industrial, industrial automation, and medical; negative figures, on the other hand, were recorded for the automotive and transportation sectors.

Fortunately, the outlook for 2021 is one of recovery and growth.One trend to consider within this market is definitely innovation.

In recent years, the demand for microchips has increased exponentially, which is why there has been a chip crisis, also due to a shortage of manufacturers. So, it is crucial to find innovative solutions to meet the increasing customer demand for these components.

it is also important to take sustainability into consideration when dealing with this market. The electronic components sector certainly has a strong environmental impact given the large use of energy and also given the large amount of toxic waste produced. Measures must therefore be taken to address this problem.

From the data above, it can be seen that the electronic components market is definitely growing and has a good chance of being penetrated.

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Latest news

Chip investments in Europe reach 100 billion euros - 11/08/2023
  • The European Union aims to double semiconductor production by 2030 to 20% of the global share.
  • Over 100 billion euros of investment is planned in semiconductor production in Europe.
  • The "Chips Act" was passed with an initial allocation of 43 billion in subsidies.
  • TSMC plans to invest up to 10 billion euros in its first European plant in Germany.
  • Intel plans to invest 30 billion euros in Germany, 4.6 billion in Poland and 12 billion in Ireland.
  • In France, STMicrelectronics and GlobalFoundaries are investing 7.5 billion euros in a project at Crolles.
  • Infineon plans to invest 5 billion euros in a plant in Dresden.
  • Broadcom plans to build a site in Spain at a cost of one billion euros.
  • The PIIEC, which brings together 20 European countries and 56 companies, accounts for 22 billion euros of investment.

Companies quoted in this study

This study contains a complete overview of the companies in the market, with the latest figures and news for each company. :

Thales DIS (Digital Identity & Security)
ABB Robotics
TSM Sensors SPA
Eldor Corporation SPA
LFOUNDRY SRL
MEMC ELECTRONIC MATERIALS S.P.A.
STMicroelectronics

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