According to a new study by Grand View Research, Inc., the global active electronic components market size is anticipated to reach USD 495.2 billion by 2025, registering a Compound Annual Growth Rate of 9.6 percent from 2019 to 2025. Factors responsible for driving this market growth include the increasing demand for active electronics components in networking devices and telecom equipment requisite for developing 5G infrastructure.
Electronic component distributors play a major role in the supply chain for providing electronic equipment
manufacturers with the components they require. This is because distribution is a complicated process and obtaining the components in the right place at the right time is vital to a successful operation.
The upstream of the semiconductor industry has become a minority oligopoly, owing to continuous merger and reorganization of this industry, globally. While the leading role of semiconductor manufacturers is becoming stronger and stronger, the distribution channels are getting more and more transparent.
The global economy is constantly evolving with emerging electronic technologies and electronic component industry being the core of this transformation. However, currently, the biggest challenge faced by the electronics component distributors is the shortage of components, which is impacting the global electronics supply chain.
Over the last few years, distributors have been continuously changing their models. Furthermore, they are also finding new ways to increase their value add by not only helping customers with new product development and reduce costs but also ensuring supply chain stability.
However, the Indian electronics systems design and manufacturing industry is well on its path to achieving its full potential in terms of both production and design capabilities. According to government sources, the domestic production of electronic goods for 2016-2017 was worth USD 49.5 billion, which was higher than the USD 43 billion spent on imports.
To further strengthen the electronic manufacturing ecosystem in India, the Union Cabinet has approved the Scheme for Promotion of the manufacturing of electronic components and Semiconductors. This scheme will provide 25 percent of capital expenditure incurred in manufacturing items, which are part of the supply chain of an electronic product.
Talking about the decisions of the cabinet, Communications, Electronics and Information Technology Minister Ravi Shankar Prasad said, “Two long-term policy decisions have been taken to make India hub of electronics manufacturing in new directions and medical electronics. Cabinet has approved production linked-incentive for electronics companies. We will give Rs 40,995 crore in the coming five years for production linked-incentive.”
“The proposal will lead to the development of electronic components manufacturing ecosystem in the country and deepening of the electronics value chain,” he added.