Active Electronic Components Market Analysis

Active Electronic Components Market (Global, 2024)

Introduction

Active Electronic Components Market is expected to play a vital role in the technological advancements of various sectors, such as consumer electronics, telecommunications, automotive and industrial applications. Demand for smarter and more efficient devices is growing and active electronic components are innovating to meet this demand. The advent of newer materials and advanced manufacturing techniques is enabling the active electronic components to evolve. These components are essential to power various electronic devices. The increasing use of the Internet of Things and smart devices is further expected to boost the growth of this market. The market is characterized by strategic collaborations, acquisitions and alliances as companies seek to strengthen their position in the market and diversify their product offerings to meet the dynamic demands of the global market.

PESTLE Analysis

Political

In 2024, the active electronic components market is strongly influenced by government policies to encourage innovation and the manufacturing industry. For example, the U.S. government has allocated about $52 billion to stimulate the production of semiconductors through the CHIPS program, which aims to strengthen the industry and reduce the dependence on foreign suppliers. In addition, the trade policies and tariffs imposed on certain countries have increased the cost of imported components by about 15%, which will have a significant impact on the strategy of manufacturers.

Economic

In 2024 the world economy is in mixed condition after the pandemic. The major economies are experiencing a rise in inflation to about 3.2 per cent. In this environment, there is a further increase in spending on consumer electronics. It is expected that by 2024 a total of $ 1 560 billion will be spent on consumer electronics worldwide. Meanwhile, the unemployment rate in the technology sector has fallen to 4.1 per cent, indicating a tighter labour market that could lead to a rise in wages and operating costs for companies in the active electronic components market.

Social

Preferences for more sustainable and energy-efficient appliances are growing. Surveys show that by 2024, 68% of consumers are willing to pay a premium for green appliances, which is causing manufacturers to rethink the way they develop active components. Moreover, the rise of remote work is driving a demand for personal devices. Sales of laptops and tablets are up by an estimated 45% compared to the pre-pandemic period, and this is also having an effect on the market.

Technological

The active components market continues to be influenced by technological development. The investment in research and development in the semiconductor industry is estimated to reach a billion dollars, with the aim of developing smaller and more efficient components. The emergence of 5G and the Internet of Things will increase the demand for active components. By 2024, the number of 5G subscribers will exceed one billion, and this will open up new opportunities for manufacturers.

Legal

In 2024, the regulations on the disposal of e-waste and on the recovery of e-waste are to become more stringent. The WEEE Directive stipulates that at least 65% of e-waste should be recovered. This will affect the operational practices of manufacturers. These regulations will increase their operating costs by about 10%, because they will have to invest in sustainable recovery and disposal processes.

Environmental

In 2024, the active electronic components market is expected to be increasingly influenced by concerns for the environment. Carbon neutrality is the goal of a worldwide movement, and companies are obliged to reduce their carbon footprint by 30 per cent by 2030. In response, manufacturers are investing in greener production processes, with an estimated $ 20 billion being earmarked for sustainable production. Also, the use of hazardous substances is being closely scrutinized. The use of lead and mercury is being restricted by new legislation.

Porter's Five Forces

Threat of New Entrants

The barriers to entry to the active electrical components market are moderate, as it requires significant investment in technology and manufacturing capabilities. But new entrants can still find opportunities in niche segments or by offering new products. However, strong brand loyalty and established distribution channels will make it difficult for new competitors to enter the market.

Bargaining Power of Suppliers

Suppliers of active components are generally of low bargaining power in the active components market, since manufacturers have a large number of suppliers to choose from. Suppliers of active components have a large number of competitors who offer similar products, which allows manufacturers to change suppliers easily. The competition between suppliers of active components keeps prices relatively stable, and restricts suppliers’ influence on manufacturers.

Bargaining Power of Buyers

The buyers in this market have high bargaining power, for they are usually large manufacturers with large purchasing volumes. They can easily change suppliers and thus get the best terms and prices. Moreover, the existence of a large number of alternative products and suppliers gives them additional power, so that suppliers must offer high-quality and competitively priced products.

Threat of Substitutes

The threat of substitutes on the Active Electronic Components Market is moderate. There are, of course, alternative methods and components that can be used to perform the same functions, but with the rapid progress in technology, substitutes do not always provide the same performance and reliability. But as technology develops, new substitutes may be developed, which may affect the demand for traditional active electronic components.

Competitive Rivalry

Competition in the active components market is very intense, driven by the large number of established players and the constant need for innovation. The companies compete with each other in terms of marketing and product development to ensure that their products stand out. Price competition is also very strong, as the companies seek to capture market share in a constantly changing technological and customer environment.

SWOT Analysis

Strengths

• High demand for consumer electronics driving growth.
• Technological advancements leading to improved performance and efficiency.
• Strong presence of key players with established brand recognition.
• Diverse applications across various industries including automotive, telecommunications, and healthcare.

Weaknesses

• High initial investment costs for research and development.
• Dependency on raw material availability and supply chain stability.
• Rapid technological changes leading to potential obsolescence.
• Limited market penetration in developing regions.

Opportunities

• Growing adoption of IoT devices creating new market segments.
• Expansion of electric vehicles increasing demand for active components.
• Emerging markets presenting untapped growth potential.
• Increased focus on renewable energy solutions driving innovation.

Threats

• Intense competition leading to price wars and reduced margins.
• Global economic uncertainties affecting consumer spending.
• Regulatory challenges and compliance costs.
• Potential disruptions in supply chains due to geopolitical tensions.

Summary

The Active Electronics Components Market in 2024 is characterized by a high demand for components driven by technological developments and growing consumer electronics. However, the market is faced with the challenges of high R & D costs and supply chain risks. Opportunities are the growing Internet of Things and the electric vehicle market. Threats include intense competition and macroeconomic risks. The strengths of companies are to seize opportunities and overcome weaknesses to counteract the threats.