Computing, consumer and communications companies are the three C application sectors that have driven the electronics industry in recent times. But as globalization — and free trade — have taken hold and we have moved from national to regional champions in these areas and then on to global winners, Europe has lost many of its equipment companies serving these sectors.

In computers ICL, Siemens-Nixdorf, Olivetti are no more and Europe, like the rest of the world, buys from Apple, Dell and Lenovo. In consumer electronics brands like Bush, Philips, Grundig have either pulled out of markets or are not what they were. And finally in telecoms we have witnessed the fall of one-time mobile phone handset market leader Nokia as well as changing fortunes at Ericsson and the disappearance of Alcatel albeit into a revamped Nokia equipment company.

Electronica 2016: Back to busy.

So component and technology companies no longer need to come to Electronica to pitch to these companies and that might seem like the essence of a tragic story of post-industrial decline.

What Europe has attained — indeed what Germany has attained, setting aside some software shenanigans perpetrated by Volkswagen — is a global leadership in the automotive sector. This is particularly true at the high end where automotive electronics is being adopted fastest by the likes of Audi, BMW and Daimler. And through the still healthy ‘Mittelstand’ that makes up a majority of employment in Germany Europe retains a healthy industrial electronics sector. The Mittelstand is the hypothetical part of Germany inhabited by small- and medium-sized businesses. Companies there tend to be family-owned, science- or technology-based, and run on traditional, debt-free lines. And many of these small companies are nimble power houses in industrial electronics, precision instrumentation and factory automation.

Next: Electronica stripped back

And Electronica in 2016 reflected these changes. Just about all the computer, consumer and communications interest has been stripped out of Electronica. Those sectors have their own global events such as Computex in Taiwan, the Consumer Electronics Show in Las Vegas and Mobile World Congress in Barcelona.

The Fujitsu booth at Electronica addressed industrial and automotive themes

But at Electronica companies came from all over the world to pitch their products for automotive, industrial and Internet of Things applications. Exhibitor after exhibitor told me that Electronica is now part of a global calendar that takes in all the territories and all topics. The fragmentary nature of industrial and IoT markets and their lower volume, higher value nature means that Electronica has become a second home for the distribution companies and it is they that tend to have the largest booths.

Indeed, in 2016 there was a happy coincidence of a reasonably healthy global economy and the realization that automotive and industrial electronics provide steady if moderate growth, reasonable margins and stability; a comforting contrast to the rollercoaster ride of the consumer and smartphone sectors. We have been seen the European chip companies Infineon, NXP, STMicroelectronics, AMS and others turning away from the three Cs and towards automotive, transportation, industrial, reneweable energy and energy distribution applications. Now many of their peers are following suit.

Qualcomm’s small booth showed off its Halo wireless automobile charging technology.

And it was noticeable that Qualcomm was at Electronica; albeit on smallish booth but one packed with automotive temperature grade Snapdragon processors, mock ups of automotive dashboards and references to its Halo wireless charging technology for automobiles. The takeover of NXP by Qualcomm can be seen as the desire by Qualcomm to move beyond the saturated and diminishing margins of mobile communications and to bring its wireless communications expertise to the automotive and industrial applications. Similarly, semiconductor giant Samsung had a booth that essentially addressed automotive and embedded applications.

And Electronica was busy. The U-bahn crush index — the degree to which I find it possible or impossible to get on a Messe-bound train first thing in the morning — was up on two years ago and definitely up on four years ago.

Next: The Chinese are coming

The Chinese are coming

There is also the China effect. Chinese and other south-east Asian companies, now that they are established at home, are increasingly looking out for new territories, of which one is Europe. Chinese company names in translation typically begin with the city name where they are based, a habit that is usually dropped as companies become more anglophone and marketing savvy. But it helped me with a spot audit of the catalog to measure the degree to which China was present at this year’s Electronica. There were 19 companies from Changzhou, 10 from Cixi, 29 from Dongguan, 28 from Ningbo and 119 from Shenzhen. In total there were well over 250 small mainland Chinese companies here that, no doubt, intend to become much larger.

Consolidation on show at Electronica.

I heard one attendee state that the show seemed slightly smaller than before. But examination of the record does not bear this out. The same number of gigantic halls were in use. But there were some signs of the effects of consolidation. The odd booth-shaped area cordoned off as a sitting area and the Fairchild booth empty but for signage exhorting show attendees to make their way to the On Semiconductor booth in a different hall.

However, with something like 300 Chinese companies attending Electronica there is something to be said for the steady-state theory of electronics evolution. While one name, albeit iconic disappears, many smaller companies are arriving on the scene eager to make an impact.

Cars in various states of deconstruction could be found on many booths.

And just before Electronica opened the announcement was made that Semicon Europa, a show for chip manufacturing equipment and materials, would co-locate with Electronica and Productronica in alternate years starting in 2017. In the even years, when it is alongside Electronica, that will serve to fill up the remaining halls at the Messe.

Electronica is evolving and is now essentially an automotive, industrial and IoT electronics show but one of global scale that is going to be around for many years to come.

Related links and articles:

News articles:

The Messe U-bahn crush business indicator

Electronica: CEO forum rambles on IoT security, safety

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