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 $14-15 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
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    Jan 25, 2024 - Pricing Outstrips Rising Industry Wages
                                    • Electrical equipment manufacturing industry wages were up moderately in Q4 2023 over the same period a year earlier. However, producer prices charged by electrical equipment manufacturers grew faster than wages in Q4 compared to year-earlier levels, perhaps signaling that firms’ margins are under fewer pressures from wage growth. Industry employment was mostly flat in Q4 compared to year-earlier levels.
                                    • The value of US commercial construction starts is expected to be mixed in 2024, depending on project type, according to a recent forecast by Dodge Construction Network. Marking a potential record level of activity for the sector, manufacturing construction will rise 16% to $112 billion in 2024, supported by the CHIPS and Science Act and the Inflation Reduction Act. Amid a pullback in planned investments by major warehouse builders Walmart and Amazon, the value of warehouse construction is expected to decline 11% in 2024 to about $44 billion. Low occupancy and weaker demand will reduce office construction spending to about $37 billion in 2024, down 6% compared to 2023. Office projects will be mostly confined to alterations to existing buildings. Speculative office construction, where offices are built before securing a tenant, has become less common.
                                    • Demand for electrical equipment used in the automotive industry may hold steady, but the 2024 outlook for light vehicle demand is uncertain. According to S&P Global Mobility, US light vehicle sales are forecast to reach 15.9 million units, about 2% higher than 2023. S&P Global Mobility’s manager of North American light vehicle sales forecasting, Chris Hopson, said, "The good news is that incentives and inventory levels are progressing in the right direction. The not-so-good news is that this has not yet translated to momentum for sales levels. This could be a stouter signal that US consumers are tapped out, which would be a heightened risk for auto demand as new vehicle consumers continue to face affordability issues by way of high interest rates, tight credit conditions and slow-to-recede vehicle prices."
                                    • Home builder confidence improved in December amid moderating mortgage rates that remained well below 7%, according to the National Association of Home Builders (NAHB). Home builder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), rose seven points to 44 in December 2022, which marked the second consecutive month of strengthening confidence. Any HMI reading over 50 indicates that more builders see conditions as good than poor. The NAHB said that while lower interest rates have improved affordability and drawn more buyers back to the market, 2024 could bring supply-side headwinds, including shortages of workers, materials, and available lots.
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