Electronics/ICT Industry Trends June 2024

Global electronics/ICT output expected to grow by 5.3% in 2024 and by 6.3% in 2025

• Computers & office equipment output and sales rebound in 2024 and 2025 as computing devices bought during the pandemic are replaced.
• Electronic components & boards production to increase by about 9% annually in 2024 and 2025. Semiconductor output is driven by the AI boom.
• Telecommunications equipment production and sales to grow at about 5% annually in 2024 and 2025, supported by upgrades to mobile and broadband infrastructure.

US electronics/ICT: Solid growth driven by semiconductors

• US electronics and computer production to increase by 4.7% in 2024 and by 3.4% in 2025. The surge is being driven by the electronic components and boards subsector, which we expect to expand by 9.8% this year and by 7.2% in 2025.
• Cloud computing and storage, automated data processing, and cybersecurity solutions are increasingly becoming priorities for businesses.
• Government measures will drive US chip production capacity in the medium and long term.

Asia-Pacific US-China frictions pose downside risks

• The long-term outlook for Japanese/South Korean/Taiwanese electronics/ICT producers is good. They should benefit from increased demand for semiconductors and ICT products.
• However, additional US restrictions on advanced chip exports to China could curtail sales and profits of East Asian high-tech producers.
• Chinese production of electronics and boards (including semiconductors) is forecast to grow by 9.5% this year and by 7.4% in 2025. The high-tech sector is a key area of the government´s targeted industrial strategy.
• Despite US sanctions and a technological backlog in advanced chip production, it seems that China is nevertheless moving up the chipmaking value chain.

Europe: Lower demand from automotive and high interest rates weigh on the industry

• In 2024 eurozone and UK production of electronics and computers is expected to contract by 0.4% and 0.2% respectively. A gradual recovery of the industry is expected to take place towards the end of this year.

• The EU Chips Act is set to invest EUR 43 billion in local semiconductor production and research, with the aim of lowering dependence on imports from Asia. However, the EU´s target of 20% of global production by 2030 is likely to be beyond reach.

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