Electronic Component Market Trend & Insights
- Christoph Horlebein
- Jan 22
- 2 min read
Updated: Mar 25
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.
Understanding Today’s Electronic Component Market—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).
Understanding Today’s Electronic Component Market—Obsolescence Prevalence and Unannounced Obsolescences
Year | # of electronics obsolescence | % of obsolescences without prior PDN |
2021 | 528,546 | - |
2022 | 756,087 | - |
2023 | 473,910 | 30% |
2024 | ~500,000 | 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 new design management (components in decline state 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).
Understanding today’s semiconductors market—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).
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