Electronic Component Manufacturers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 1,500 electronic component manufacturers in the US develop and sell transformers, connectors, and other miscellaneous electronic components. Miscellaneous electronic components include computer cable sets; crystals and crystal assemblies; filters; harness assemblies; LCD screens; microwave components; phonograph needles; piezoelectric devices; printed circuit laminates; recording heads; rectifiers; resonant reed devices; rheostats; solenoids; switches; and transducers. Firms may also engage in production of related electronic components, such as printed circuit boards, capacitors, resistors, semiconductors, or antennas. Some companies offer engineering or design services.
Rapidly Advancing Technology
The electronics industry is characterized by rapid advances in technology and evolution of standards.
Foreign Production
Operating production facilities in foreign countries is complex and affects a component manufacturer’s responsiveness.
Industry size & Structure
The average electronic components manufacturer operates out of a single location, employs about 60 workers, and generates about $21 million in annual revenue.
- The electronic coil, transformer, and inductor manufacturing industry consists of 312 firms that employ 18,000 workers and generate $4.1 billion annually. The electronic connector manufacturing industry consists of about 157 firms that employ 19,800 workers and generate about $5.9 billion annually. The miscellaneous electronic component manufacturing industry consists of 989 firms that employ 51,000 workers and generate $12.3 billion annually.
- The electronic coil, transformer, inductor, and connector manufacturing industries are concentrated; the top 50 companies account for 75% to 95% of industry revenue. The miscellaneous electronic component manufacturing industry is less concentrated; the top 50 companies account for about 58% of industry revenue.
- Manufacturers of miscellaneous electronic components account for 55% of industry revenue and 68% of firms. Electronic connector manufacturers account for 27% of revenue and 10% of firms. Electronic coil, transformer, and inductor manufacturers account for 18% of revenue and 22% of firms.
- Large firms include Pulse Electronics, Bel Fuse, Planar Systems (LCD displays), and Hutchinson Technology (TDK - disk drive components).
- Large firms may have international operations and serve customers in foreign countries.
Industry Forecast
Electronic Component Manufacturers Industry Growth
Recent Developments
Nov 5, 2024 - Weak Manufacturing Activity may Reduce Demand
- Manufacturing activity, a driver of demand for electronic components, remains subdued, according to Electronics Purchasing and Supply Chain News. The Institute for Supply Management’s manufacturing index, the PMI, was unchanged month over month in September at a level of 47.2 and remained below the index’s growth threshold of 50.0. “Demand is nowhere to be found,” said Tim Fiore, chair of the ISM’s manufacturing survey committee. “Production came down and it has steadily been creeping down in a controlled manner in response to demand signals.” Two industries expanded in August: computers and electronics, but the ISM does not expect manufacturing will move all that much in the next several months. Uncertainly regarding both the Federal Reserve’s plan for interest rates and the US presidential election has significantly slowed many manufacturing sectors.
- Electronic component manufacturers benefiting from reshoring may also benefit from nearshoring, according to the Reshoring Initiative (RI). Harry Moser, founder of RI, says that if a product is so labor intensive that you can’t bring it to the US, then companies are sometimes surprised to find that wages in Mexico are far lower than in China. The average Mexican manufacturing worker earns $4 an hour, while the rate in China — where wages have been gaining 10% to 15% a year — is currently around $7, and in the US, it’s roughly $23. Products coming from Mexico end up with an average 40% US content, while in China they have 5% US content.
- Management consulting firm McKinsey has projected a shortage of 90,000 skilled technicians in the US by 2030. Electronic component manufacturers may struggle to fill open positions as a result. McKinsey expects demand for technology skills to rise 20% above 2019 levels (based on hours) by 2030. Many firms are struggling on three fronts: talent acquisition, retention, and organizational health, according to McKinsey. Companies need to respond by getting a strategic grip on the challenge and creating career offerings at least as attractive as those of tech giants that have been more successful on these fronts.
- Electronic component shipments increased 2.6% year over year and 1.4% month over month in June, according to the US Census Bureau. Electronic component prices decreased slightly during the first nine months of 2024, according to the US Bureau of Labor Statistics (BLS). Electronic component manufacturing industry employment increased slightly while average wages for nonsupervisory employees increased moderately during the first nine months of 2024, according to the BLS. New orders for electronic components began rising at the start of the coronavirus pandemic and remain above pre-pandemic levels.
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