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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, 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 58 workers, and generates about $14-15 million in annual revenue.

    • The electronic coil, transformer, and inductor manufacturing industry consists of 338 firms that employ 18,000 workers and generate $4.1 billion annually. The electronic connector manufacturing industry consists of about 156 firms that employ 19,800 workers and generate about $5.9 billion annually. The miscellaneous electronic component manufacturing industry consists of 1,035 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

                                    Coronavirus Update

                                    May 9, 2022 - China Will Continue With “Zero-COVID” Strategy
                                    • China Vice Premier Sun Chunlan said that the country will continue its “dynamic zero-Covid” strategy “without hesitation or wavering.” Experts say that the strategy favors measures such as mass testing, forced quarantines, and city-wide lockdowns. China has rejected effective mRNA COVID-19 vaccine technology, relying instead on traditional, inactivated vaccines to achieve its 86.6% fully vaccinated rate. Inactivated vaccines are less effective against Omicron and, analysts suspect, China's exclusive use of the old technology is the primary reason why China's borders remain mostly sealed to the outside world. Experts also say that, while President Xi Jinping hoped to minimize the cost of a zero-Covid strategy, this renewed campaign will rapidly and exponentially take a heavy economic toll. It will further suppress exacerbate supply chain disruption, suppress domestic consumption, and encourage the exodus of investors.
                                    • Domestic manufacturers may benefit from pandemic-related factory closures in China. China’s manufacturing output decreased at the sharpest pace in 26 months in April amid escalating COVID-19 lockdowns. The Caixin/Markit purchasing managers’ index (PMI) decreased to 46.0 in April from 48.1 in March. A reading below 50 suggests output is contracting rather than expanding. The rate of decline in manufacturing production was the second steepest since the survey began in early 2004, beaten only by the reduction seen at the initial onset of the pandemic in February 2020.
                                    • Vietnamese factories making everything from shoes through electronic components to smartphones are expected to continue production despite record COVID-19 infections, reversing a policy of sweeping lockdowns put in place in 2021. The number of COVID-19 infections being reported in Vietnam in mid-February was about double the peak at the same time in 2021, when factories were shut for months. Millions of factory workers have been fully vaccinated and the Omicron variant is proving less severe, government officials said.
                                    • The Biden administration withdrew in late January its Covid-19 vaccine-or-test requirements for businesses with 100 or more employees. The withdrawal followed a Supreme Court decision to block the rule. Experts say that the Supreme Court majority sent a clear message that the Occupational Safety and Health Administration (OSHA), which is charged with protecting workplace safety, had overstepped its authority with the regulation. The justices said, however, that a separate agency could issue a rule to protect the health and safety of Medicare and Medicaid patients.
                                    • About 80% of chip makers say that it's become hard to find workers, many of whom must be specially trained to handle the highly toxic compounds used in semiconductor manufacturing. The problem is worse in North America and in Asia, where more companies are reporting rising labor costs compared to those in Europe. Electronic component manufacturers may struggle to source parts with semiconductor chips due to chip makers’ difficulties.
                                    • Industry experts say that components which were previously on 16-week lead times are now on 32 weeks due to pandemic-related supply chain issues, and some semiconductor manufacturers are asking for orders to be placed two years in advance.
                                    • Rising prices for copper and other metals and potential shortages of multilayer ceramic capacitors, power MOSFETs, and other components are some of the supply chain challenges that electronic component manufacturers face, according to Electronics Sourcing magazine. Another issue of growing concern is supplier consolidation. “When this happens, we often see that product availability is impacted due to rationalization of products, which in effect leads to end-of-life of redundant or similar products,” said Shabnam Shaghafi, vice president of supply chain for EMS provider Benchmark Electronics. Consolidation-driven product rationalization may force the redesign of electronic components ahead of schedule.
                                    • The United States must find a path to domestic sources for the important microelectronics that are used in defense weapons systems, according to US Department of Defense (DOD) Under Secretary of Defense for Acquisition and Sustainment Ellen M. Lord. "While we still design components, [field-programmable gate arrays], [application-specific integrated circuits], and printed circuit cards in the US, the majority of fabrication, packaging, testing, etc. is done offshore," Lord said. "We can no longer clearly identify the pedigree of our microelectronics. Therefore, we can no longer ensure that backdoors, malicious code or data exfiltration commands aren't embedded in our code."
                                    • Employment in the electronic component manufacturing industry increased 6.7% year over year in March.
                                    Get A Demo

                                    Vertical IQ’s Industry Intelligence Platform

                                    See for yourself why nearly 40,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.

                                    Build valuable, lasting relationships by having smarter conversations -
                                    check out Vertical IQ today.

                                    Request A Demo