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2023's Top Electronics Industry Trends

A lot happened in 2022, including the tail end of a global pandemic and the rising cost of living. This had a major impact on economies around the world. It created an air of uncertainty, something that has impacted the electronics manufacturing industry. This impact is something that we can expect to see reflected in 2023 by several key trends. Below, we have taken a look at some of the trends electronics manufacturers should be considering as they venture into the year.

1. Growing Demand for Sustainable Electronics

There is a growing demand for sustainable electronics, and this is largely due to consumers becoming more aware of the importance of sustainability due to global warming. Electronics manufacturers are seeing a rising demand for sustainable innovation and the most promising new manufacturing approaches. These are primarily focused on the fundamental building blocks of electronics - printed circuit boards (PCBs) and integrated circuits (ICs). Currently, the electronics industry accounts for 4% of greenhouse gas emissions, with the implementation of low-emission manufacturing processes or the adoption of material recycling and recovery schemes being the financially astute choice. The opportunity to reduce costs associated with energy consumption and waste treatment is keeping the industry ahead of the curve as legislation becomes stricter while positioning individual companies well to benefit from designated ESG investment. For example, switching to additive methods of PCB manufacturing can lower water consumption by up to 95%.

2. Rising Popularity of AI Solutions

Thanks to artificial intelligence solutions, the electronics manufacturing industry is developing, and this is because there is a growing demand for components that can work alongside AI. As the manufacturing and design process improves, AI is becoming an increasingly important part of the industry. With the rise in smart factories, hyperconnected supply chains and digital supply networks are already improving productivity levels by at least 12%. Whereas some aspects of manufacturing are limited, AI is helping to remove some of these limitations, and many companies are beginning to see the benefits of utilising AI solutions e.g., AI Process optimisation automates quality control by helping to identify and remove defective units before they waste more time, materials, and energy.  In 2023, AI is going to be a bigger part of the electronics manufacturing industry than it has been previously.

3. Electronics Production Impacted by Inflation 

IPC’s June 2022 Global Sentiment of the Electronic Supply Chain report, states that 86% of electronics manufacturers are worried about inflation, and 90% are already noticing a rise in the cost of materials. This, along with rising labour costs, has meant that a larger number of electronics OEMs are having to increase prices, whilst trying to remain competitive via greater efficiency. This is a difficult balance to achieve, and most manufacturers are having to optimise internal processes, leading to a growing reliance on digitalisation, which helps manufacturers control their assets and inventory, whilst employees benefit from automated tools, processes, and greater flexibility.

4. Embracing New and Changing Materials

The electronics manufacturing industry has relied heavily on silicone for decades, but now, as technology advances, new materials are being tested and explored. The production of silicone has also been linked to numerous environmental issues and its disposal can be extremely harmful since silicone is a non-biodegradable material, meaning it takes centuries to decompose, leading to the potential for land and water contamination. As technology progresses, manufacturers are searching for more efficient and cost-effective materials, as well as materials that are lighter and more durable. Organic polymers, graphene, and liquid metals are just some of the new materials being tested, and these materials offer certain advantages over silicone, such as increased flexibility and customisation. The challenge for manufacturers is to keep up with the ever-evolving technology and to find ways to make their production processes more efficient and cost-effective whilst maintaining customer supplies based on existing technology. 

5. Component Shortages Caused by a Move Away from China

According to a CNBC report, China’s COVID policy led to 40% of electronics OEM’s moving some manufacturing to other global locations. This is due to the increasing cost of labour in China, as well as changing export controls and tariffs on semiconductors, chip manufacturing technology and finished assemblies. This resulted in some of global component shortages. Some of the locations that OEMs are turning to include countries such as Vietnam, India, and Mexico. These countries offer lower labour costs and better working conditions. Businesses are moving some of their supply networks and production processes elsewhere, but this isn’t something that will happen overnight. These changes are helping to create a more diverse and competitive global economy.

The future of the electronics industry is all about sustainability and innovation. Companies need to be prepared for strategic challenges whilst addressing the global talent shortage of electronic and high-tech professional. Businesses need to invest in providing training and development opportunities to successfully meet the demands of today’s digital world.

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