News & Analysis

ecsn/AFDEC sees 2.8 % growth for components in 2023

2nd December 2022
Mick Elliott

ecsn/AFDEC is forecasting 2.8% growth in 2023 for the UK and Ireland component distribution market.

It says the Distributors Total Available Market (DTAM) will rise to £1.75 billion in 2023, which represents 45% of the Total Available Market (TAM) for electronic components. The TAM will edge forward from £3.89 billion in 2022 to £3.9 billion in 2023.

Feedback from authorised distributors who comprise the AFDEC membership suggests a confidence that the market will continue to grow in the first half of 2023.

“Strong billings” are reported by AFDEC members alongside what they describe as a growing and significant demand for applications based on 5G and infrastructure for smart vehicles, cloud computing, automotive and military spending offsetting the decline in consumer confidence battered by inflation.

The book to bill ratio is expected to fall as component availability returns to more normal levels in 2023.

“Looking further into the second half of the year is more difficult,” says Aubrey Dunford, ecsn market analyst. “Many uncertainties remain, especially in the light of a predicted recession in the global economy, so we are forecasting growth to slow at the end of the year.”

ecsn/AFDEC predicts 4 % growth in Q1 2023 and 3 % growth in Q2 before a slowdown to 2 % growth in Q3 and Q4 2023.

ecsn/AFDEC upgraded its 2022 market forecast from the 10% guidance issued in December last year to 18.7%.

ecsn Chairman Adam Fletcher explains, “It has been primarily driven by customers concerns about the availability of components. Geopolitical tensions, logistics delays and the US/China trade war have prompted customers to maintain their increased in-house inventory and order backlogs.”

Regular price increases imposed by suppliers across the components spectrum have also contributed to 2022's growth market.

The consensus opinion amongst ecsn members is that by mid-2023 component lead times will be stabilised at around 12 to 16 weeks for most semiconductor and passive components, with interconnect and electromechanical components easing to 8 to 10 weeks.

Exceptions will include microcontrollers where some suppliers are still quoting up to 52 weeks lead times.

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