Worldwide Business Information and Market Reports

ISBN 1-85765-834-5
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After a period of rapid expansion between 1993 and
1996, the electronic component distribution market has since remained flat or
declining in value. In 1997, the total market was worth £5.18bn, at
distributors' prices. Despite the contraction in total market value, it is
important to note that volume demand for components throughout the review
period has grown steadily.
Active components include any item that will
modify the operation of an electronic circuit by active software or control
commands. Semiconductors account for the largest proportion of the active
component sector. Passive devices are discrete pieces of hardware, which modify
the operation of an electronic circuit by virtue of their physical.
Electromagnetic components include such devices as connectors, relays and
switches.
The strength of Sterling in the past 18 months has
been a serious cause for concern for both manufacturers and distributors of
electronic components. Export markets are more difficult to penetrate with
Sterling at such high levels. Competition in domestic markets is intensified by
foreign competitors taking advantage of the relative weakness of their own
currencies. However, some manufacturers and distributors have been able to
reduce costs by sourcing components from abroad, while others are protected by
contracts with suppliers. The collapse of some currencies, above all in South
East Asia, has exacerbated the problems for UK manufacturers and distributors
of electronic components.
During 1997, the electronic component market in
Europe was affected both by the worldwide imbalance between supply and demand,
and by general economic uncertainty in the region. More specifically, the
European distribution market is believed to have declined during 1996/1997.
This decline appears to have coincided with the bottom of the semiconductor
market cycle. Over the past 2 years, demand for digital goods has been strong.
Production of industrial electronic equipment also continued to be strong.
However, production of major products, such as televisions (TVs) and video
cassette recorders (VCRs), remained sluggish.
By the year 2002, Key Note forecasts that the value of the UK electronic components distribution market will have grown to around £9bn. This represents a 64.8 percent increase over the 5-year period from 1998. Key Note expects limited market growth in 1998, as the current oversupply situation in some market segments corrects itself. However, from 1999 there will be steady growth in the overall market up to the year 2002.
Text © 1998 Key Note
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Last updated by Duncan Nottage 5th March 1999