Electronic Component Distribution Market Report 2000
- ID: 3630
- January 2000
- Region: United Kingdom
- Key Note Ltd
The electronic component distribution sector comprises companies engaged in the distribution of active, passive and electromagnetic electronic components, either manufactured by the companies concerned or supplied by specialist manufacturers. In 1999, the electronic components market was worth £6.74bn.
Between 1995 and 1999, the market experienced a period of strong growth in volume terms, but in most market segments, market value actually declined in the last 2 years of the review period. The latter part of 1998 and 1999 has witnessed a general slowdown in the growth of the value of the UK electronic components market, due largely to oversupply, a tightening economic climate and the effect of the continuing strength of sterling. However, as the supply situation is tightening, excess capacity is reduced and prospects for 2000 look favourable.
Although the UK electronics market is mature, the UK Government's commitment to digital broadcasting technology and the liberalised nature of the UK telecommunications industry offer good opportunities for investment in consumer electronics and the components essential to them. Nevertheless, the wide fluctuations of the pound and indecision over European Monetary Union (EMU) do seem to be causing some companies a measure of concern. The current strength of the pound is very unwelcome. Export competitiveness has been reduced due to the strengthening of the pound over the past 3 years. This has outweighed the probable short-term benefit of the strong pound on reducing import costs.
The strength of sterling in the past 2 years 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 and competition in domestic markets is intensified by foreign competitors taking advantage of the relative weakness of their own currencies. The collapse of some currencies, above all in South East Asia, has exacerbated the problems for UK-based manufacturers.
Key Note expects the value of the electronic components markets in the UK to grow by over 57% in real terms, to reach around £10.61bn by the end of 2004. Key Note anticipates limited market growth in 2000, as the over-supply situation in some market segments corrects itself. However, from 2001 there will be steady growth in the overall market. SHOW LESS READ MORE >