Electronic Specifier Design Magazine, December 2024
The electronics industry is facing a complex and uncertain landscape, with a ‘Tale of Two Cities’ dynamic playing out. On one hand, there are significant headwinds and challenges, particularly in areas like the automotive and industrial sectors that are facing economic uncertainty. However, there is also a palpable enthusiasm and drive for innovation, as companies look to develop new products and technologies that can capitalise on emerging trends.
This dichotomy is reflected in the expected consumer spending for the upcoming holiday season. Analysts predict that consumers will spend around $240 billion, with electronics making up more than half of that total. The key drivers are expected to be familiar categories like mobile phones, laptops, and TVs, as well as some newer AI-enabled products that are starting to gain traction. However, the overall market is tighter, with less pronounced discounting and promotional activity compared to previous years. This suggests a more balanced supply-demand dynamic, but also potentially less incentive for consumers to make impulse purchases.
Looking ahead, one of the biggest wildcards is the potential impact of geopolitical events, particularly the prospect of new tariffs and trade policies under a potential Trump administration. There are concerns that broad-based tariff increases could have a significant ripple effect throughout the electronics supply chain, driving up costs and disrupting the flow of components and materials. This could lead to price increases for consumers, as well as forcing companies to rethink their sourcing and manufacturing strategies.
To navigate this complex and volatile environment, ‘design for resilience’ will become increasingly important – using data, analytics, and AI-powered tools to make more informed decisions about product design, component selection, and supply chain management. By integrating real-time intelligence on factors like lead times, pricing, and supplier risk, companies can build more flexibility and responsiveness into their operations. This could involve everything from identifying alternative sourcing options to rethinking product architectures to reduce reliance on constrained components.
