Electronic Component Market Trends and Insights
- Christoph Horlebein
- Jan 22
- 3 min read
Updated: Jun 16
Introduction
In an era defined by rapid innovation and digital transformation, the semiconductor market stands at the crossroads of opportunity and vulnerability. With 75% of all semiconductors consumed by industries driven by short product lifecycles—such as consumer electronics, computing, and communications—the pressure on supply chains, lifecycle management, and design resilience has never been greater. This article explores the evolving dynamics of the electronic component market, highlighting the accelerating pace of obsolescence, the rising cost of reactive redesigns, and the critical need for proactive lifecycle strategies in a volatile global environment.
Understanding Today’s Electronic Component Market: Market Drivers
Key Message: The rapid demands of short lifecycle industries like consumer electronics and communications are transforming the semiconductor market, making mid to long lifecycle industries increasingly vulnerable.
75% of all semiconductors are consumed in industries characterized by short product lifecycles such as Consumer, Computing, and Communications (Figure 1, WSTS & SIA May 2024).
Therefore, the semiconductors market is highly driven by the needs and expectations of the 75% short lifecycle customers, leading to a decrease of the average lifecycle.
Lifecycle Trends
Key Message: Lifecycles of electronic components have decreased in average by 87% over the last decades. As the trend is drastically negative, it imposes a significant risk onto mid- to long-term lifecycle industries.
In 1970, the lifecycle of a semiconductor was expected to be about 30 years. By 2014 semiconductor lifecycles were reduced to 10 years—a 67 percent reduction since 1970 (IHS).
Currently, the average electronic component has a lifecycle of less than 4 years—a 87 percent reduction since 1970 (SiliconExpert).
Obsolescence Prevalence and Unannounced Obsolescences
Year | # of electronics obsolescence | % of obsolescences without PDN |
2021 | 528,546 | - |
2022 | 756,087 | - |
2023 | 473,910 | 142,173 (30%) |
2024 | ~500,000 | 185,000 (37%) |
Key Message: Reactive approaches fail to address 37% of electronic discontinuations, leading to costly stock-outs, production stops, market share/reputation losses and firefighting redesign projects.
In 2024, approximately 185,000 parts, or 37% of all obsoleted components, lacked a Product Discontinuation Notification (PDN) from the manufacturer, leaving clients with no opportunity to respond to the discontinuation (Z2Data). This lack of prior communication resulted in significant impacts, including stock-outs, penalty charges, and costly redesign projects, as no Last Time Buys (LTBs) were possible, and all outstanding orders got canceled.
Understanding Today’s Semiconductors Market—Cost of Redesign
Key Message: Product redesigns e.g. caused by a missed Product Discontinuation Notification, faulty Last Time Buy (LTB) / Life Time Buy inventory management, or faulty NPI management (high-risk components being used in a new product design) are costly. Proactive strategies can prevent redesigns.
Product redesigns triggered by part obsolescence can cost between $20,000 and $2 million, depending on the industry. For example, in the Medical Devices or Aerospace/Defense sectors, redesign costs can increase to between $30,000 and $33 million (Figure 2, adapted from Flip Electronics).
Lead Times
Year | Average lead times for semiconductors |
2019 (pre COVID) | 12-16 weeks |
2022 (post COVID) | 40-52+ weeks |
Key message: Sudden unplanned events such as
o epidemies (e.g. COVID-19),
o natural disasters (e.g. Taiwan earthquake April 2024),
o human errors (e.g. 2021 Suez Canal obstruction),
o or geopolitical threats (e.g. China-Taiwan tensions, Trump's Tariffs)
can severely impact and disrupt supply chains, imposing high risk of stock-out, production stop, market share/reputation loss and costly firefighting redesign projects (Avnet Abacus).
Key Takeaways
As the semiconductor landscape continues to evolve under the weight of shrinking lifecycles, unpredictable disruptions, and rising redesign costs, organizations must rethink their approach to component management. The data is clear: reactive strategies are no longer sufficient. To safeguard innovation, ensure supply continuity, and protect long-term investments, businesses must adopt forward-looking, data-driven practices that anticipate obsolescence and mitigate risk. In a world where a single missed notification can cost millions, the future belongs to those who plan ahead.
With lifecycles shrinking and unplanned obsolescence on the rise, the risks to long-term product strategies are growing. Now is the time to assess your component lifecycle approach.
→ Let's review your current risk exposure and
→ Start building a more resilient strategy today.
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